Spring is normally the busiest time of the year for residential property sales, and the question that is on the lips of everyone in the real estate industry is “What will happen to property this Spring?”

Let’s start by looking at supply.

Sydney and Perth are showing signs that there will be a surge of supply in spring, with new listings up 7% and 5% respectively in late August.

Supply is still down across the rest of Australia. Melbourne, still in lockdown, naturally has the lowest with a 59% decrease compared to last year.

Other than Sydney, average capital city listings are down 19% from last year. Owners are clearly wary of selling. One explanation for this is that homeowners are wary of lockdowns being implemented mid-sales campaign, once they’ve already committed. So they’re simply holding tight.

In short, supply is constrained, which is normally an indicator of rising prices to come.

And now let’s look at demand.

According to ABS data, borrowing in June was 9 per cent higher than 12 months before, despite the first wave having only just ended. First home buyers led the way, indicating that the various grants and stimulus packages for first home buyers are at least partially successful.

The interest rates on fixed interest loans are 100 basis points lower than last year, so we can expect to see new buyers from the fortunate Australians who didn’t require JobSeeker or JobKeeper; buyers who are taking advantage of low interest rates.

As long as there isn’t a major new wave of COVID infections, the most likely path for property this Spring is low volumes and relatively steady prices.