Greater open home attendance, increase in appraisals point to renewed spark in property market

Buyers and sellers are testing the waters in droves with renewed confidence driving an uptick in open home inspections and appraisals after the federal election.

The trifecta of a surprise Coalition election win, the banking regulator expected to ease lending conditions and the likelihood of the Reserve Bank cutting interest rates next week has changed sentiment.

There was an 11 per cent increase nationally in the number of people attending open homes in the two weeks since May 20, according to Domain data.

It is an early sign of improved confidence in the property market, according to Domain economist Trent Wiltshire.

“It’s a good indicator of buyer interest. People, even if they’re just thinking of buying, they’re starting to attend home inspections in greater numbers,” Mr Wiltshire said.

Home owners have also shown more interest in selling in the past fortnight, with a 10 per cent increase in appraisals across Australia.

“Sales volumes have been at two-decade lows. There’s obviously a lot of sellers sitting there and holding on who may be keen to sell once the market turns around,” he said.

Despite these positive early indicators, Mr Wiltshire remained cautious.

“There are a few headwinds that remain,” he said. “Prices are still falling, lending conditions remain tight, the economy is slowing, and affordability is still a problem in a lot of capital cities even with the price falls in the past one to two years.”

Early signs more people are thinking about selling

* compared to average of previous four weeks

The boost in consumer sentiment since the election has also been felt by the big banks.

Westpac found there was a sharp uptick housing market sentiment in some states, and the Commonwealth Bank recorded its largest surge in home loan applications in more than six months.

Clearance rates in the major auction cities, Sydney and Melbourne, have also spiked in the past fortnight.

In Sydney, Bresic Whitney director Shannan Whitney said a general sense of optimism had returned to the market that was devoid for the past two years.

“Those events [of the past fortnight] have changed the psychology of potential vendors and the psychology of the buying process,” Mr Whitney said.

While his agency noticed a resurgence of interest in the property market from buyers and sellers, he believed it would take some time to translate into increased activity and clearance rates.

“More listing will flow through, naturally you expect that, but that may be a few months,” Mr Whitney said. “There will be stability for the remainder of the calendar year and moderate improvement in terms of market prices in 2020 and that’s off the back of potentially rate cuts.”

More people are attending open homes

* % change between week beginning May 20 and previous four weeks

In Melbourne, Barry Plant chief executive Michael McCarthy said his agency recorded a significant increase in open home numbers almost across all the offices.

Prior to the election, vendors were lucky to have one to two groups through on any given Saturday. Since the election, those figures have shot up to 30 to 40 groups.

“They’re atypical,” Mr McCarthy said. “Borrowers are saying now is the time to buy.”

Mr McCarthy reported that one buyer, also a banking analyst, purchased a property on the weekend and said: “If I’m not buying at the bottom of the market, I’m so close it doesn’t matter.”

These early signs of renewed buyer confidence would flow on to sellers as well, Mr McCarthy said.

In Brisbane, Place Real Estate joint managing director Sarah Hackett said her agents were working around the clock to keep up with demand that had dramatically spiked post-election.

“The effect has been immediate because people have been sitting on their hands and they’re acting straight away – I’m talking the Sunday after the election,” Ms Hackett said.

“Everything is trending to give buyers confidence … we’re meeting with people daily. I met with someone on Sunday because my Saturday was full and Monday was crazy. We’re working seven days appraising, selling, open houses. It’s been the best it’s been in a long while.

“The royal commission did buggerise us the most.”