Are prices cooling off? Here's where Australia's property market is at, halfway through spring
A busy spring selling season stoked by a high volume of new listings has not yet materialised, according to experts, fuelling competition between buyers and keeping property prices elevated.
Spring is typically the busiest time in real estate as buyers and sellers take advantage of favourable conditions, including warmer weather and increased activity, particularly before the market winds down ahead of the Christmas and New Year holiday season.
The end of winter was unseasonably strong. Domain data revealed new listings in Sydney and Melbourne had increased. Now, halfway through the season, the volume of new listings hitting the market has slowed, despite increased buyer demand.
Director of PK Property Buyer’s Agents in Sydney Peter Kelaher says while buyers have been quick off the mark to check out new listings, the supply of properties for sale has not kept up.
“We had the driest and hottest winter on record and agents were saying to people that they might as well sell the property now because they’ll have all this competition in spring … so a lot [of property] transacted in that July to August period and now it’s starting to feel like the last week of November,” he says.
“We have a situation where listings are the lowest in 30 years in certain areas. Places like the Upper North Shore have slowed a bit but while a little bit of stock is coming out there it’s only really the really good stock that’s selling.”
Domain data revealed that in September, the number of new listings across combined capital cities was down 12.3 per cent over the month, and down 0.7 per cent year-on-year.
Ray White’s chief economist Nerida Conisbee says there was an increase in listings from June to August, but they’ve hit a lull since.
“It does look like the one thing that was expected to moderate price growth and that was to increase stock on the market – doesn’t seem to be continuing to occur,” she says.
“It’s a bit problematic because there’s a lot more buyers out there but at the same time, we generally expect more sellers this time around but we’re not seeing that continuing to occur as we move into late spring.”
Predictions of the 2023 market have proven “significantly off the mark”, according to Dr Peng Yew Wong, a senior lecturer in the School of Property, Construction and Project Management at RMIT University, who says reverse undersupply has not been met.
“Amid high inflation, the high cost of living, and high mortgage rates, we expected a softening market leading into 2023,” he says.
“But the housing market has cycles and those cycles change throughout the years … and the key driver of this market is the shortage of supply. Demand is more than supply and that will push up prices, regardless of other economic factors.
“If you expect the housing market to go down in the near future, that might not occur even beyond 2025. It will not go down.”
This has created a steady auction market for some agents.
“When you’re in the 50 per cent mark of auction clearance rates, you’re in a pretty poor market but we seem to be holding ourselves because the volumes have held at around 700 to 800 but they really should be around the 1100 to 1200 mark at this time of the year,” Kelaher says.
In Canberra, however, Luke Lindley of AM Property Agency says the auction market is a “flip of the coin at the moment”.
“Canberra had a 65 per cent clearance rate this past weekend but the week prior, it was around 49 per cent,” he says.
“We sold a home at auction on Saturday, a brand new home. It was a test to the market in terms of price and on auction day, the property passed in but we sold it the same day under auction conditions for $2 million – which also set a new suburb record.
“Buyers are cautious in this market but they will pay for value.”
Despite dwindling listing numbers, Michelle Stephens of O’Brien Real Estate Carrum Downs in Melbourne says she’s seen “a lot more properties come to market”.
“Now that interest rates have been on a hold for a few months, it’s just bringing more buyer and seller confidence,” she says.
“We’re halfway through the spring selling season, then soon we’ll have the Melbourne Cup and then it’s the run home to Christmas … so there’s enough listings on the market at the moment, there’s a good choice for buyers but the only thing holding them back is the fear that there might be something better out there.”
A rise in new listings may give buyers more options but with the clock ticking on the festive season, a flood of new properties seems unlikely.
“We’re running short on time … We are starting to see that pullback across Australia so it does look like this lower listing volume that we saw in September will continue for the remainder of the year but realistically, if someone wants to sell before Christmas, they’re going to have to get their home listed before the end of October. So, the next two weeks are really critical for sellers,” Conisbee says.
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