Is it still a buyer's market? In some cities, it doesn't feel like it
The housing boom is long gone. Interest rates have been hiked 11 times and property prices have fallen. So why does it feel like some sellers still have the upper hand in some of Australia’s biggest markets?
New research from Domain shows that, compared to the same time last year, there is significantly less property for sale across the nation.
Home owners who otherwise would have listed their properties for sale have been holding back, spooked by falling prices, and the number of new listings hitting the market is down in every capital city.
When there’s significantly less property listed for sale, it puts pressure on buyers because they are competing for a much smaller pool of homes.
Sydney, Melbourne, Brisbane and the Gold Coast are all particularly low on new listings – each city is down by more than 20 per cent compared to the same time last year.
| City | Annual change |
| Canberra | -11.1% |
| Adelaide | -8.9% |
| Brisbane | -20.8% |
| Darwin | -12.7% |
| Hobart | -1.5% |
| Melbourne | -23.3% |
| Perth | -12.5% |
| Sydney | -23.0% |
| Gold Coast | -21.3% |
Domain chief of research and economics Dr Nicola Powell says that, even in a downturn, some markets will likely always see sellers retain the upper hand.
“While the market has shifted more generally in favour of buyers, I think that in tightly held or highly sought-after areas, they don’t ever truly fall into that bucket of a ‘buyers’ market’,” she says.
“Generally speaking, you find fewer quality homes come on the market during a downturn. That’s why, in certain areas, competition between buyers is strong, it’s heated.
“Perhaps some buyers are in the market thinking the opportunities are there but a seller is not going to sell it for less than they bought it for unless they have to. Buyers can be opportunistic but you also have to be realistic. Look for suburbs where the competition is not so strong and you’ll find buying conditions are more in your favour.”
In Brisbane, new listings are down by 20.8 per cent, which agents say is making things easier for those trying to sell but more difficult for buyers, particularly if they’re expecting to be able to haggle and snag a bargain.
“We’ve gone through the stage where buyers have this idea that ‘the market is dropping so, therefore, I’m in a position of power’,” says Ray White MetroWest agent Jo Langstaff.
“They were coming in and telling us they had previously been pre-approved for $1.4 million but now could only get pre-approval for $1.2 million – and then they were expecting to be able to buy the same $1.4 million property for $1.2 million … but prices never fell by that much. At that stage, they were prepared to dig their heels in and walk away.”
More recently, though, there has been a very noticeable and swift change in sentiment, she says.
“The dynamic has shifted massively this month, particularly since interest rates got held, and we’re now in a situation where buyers are realising how significant the lack of stock is.
“They’re now saying, ‘I keep missing out, tell me what do I have to do to get a property.’ They’re more desperate.”
Langstaff is selling a four-bedroom home in Kenmore, in Brisbane’s leafy western suburbs, and had 55 groups through the first open home last weekend.
“I’ve got eight offers and counting,” she says. “Where I’m selling, the bottom of the market has been and gone.
“For sellers, it’s a very good time to sell. If you’ve got a place ready to go and looking as good as it possibly can, the best advice is to go for it and sell while there’s a build-up of buyers. We’ve got new buyers who have only started looking this year but then we’ve also got buyers who were looking last year but told us they wanted to wait for the ‘market bottom’; they’re now back in the market and saying it’s time to buy.”
In Melbourne, new listings are down by a whopping 23.3 per cent, which buyer’s agent Mal James attributes to a “drought of stock”.
“We’re in a long-term demand-supply situation of less supply and more demand,” he says. “Consequently, we’re more volatile. Some properties will still be rejected by the market – buyers are still discerning – but when they do find something, they will compete.
“Are sellers at an advantage in certain markets? That is correct.
“If your home is geographically in Boroondara, if it’s priced in the $2 million to $4 million range, [it] is ready to move into [rather than in significant need of a renovation], there is nothing wrong with putting your home on the market now.
“In fact, you may find you get as much as you would’ve during the peak.”
James says the low level of stock is a reflection of last year’s negativity, which has lagged and transposed into this year, but things may change in spring.
“There is a dominant geographic market and people take their lead from there. It will give them confidence,” he says.
In Sydney, it’s a similar situation: new listings are down 23 per cent and certain regions of the city are experiencing bidding wars between buyers determined not to miss out. Buyers flocked to auctions last weekend and the clearance rate hit 74 per cent.
Leonie Piper of Marshall Chan Yahl sold 26 Barilda Avenue, Warrawee, at auction last weekend and says the owners had the advantage of not much else being on the market around them, and super high demand from buyers.
“Demand was very high and competition from other properties was low, so you’d have to say for some sellers it’s a good time to sell,” she says.
“But I would also point out that’s only so long as you’ve presented the house well, it’s in a good location – this house was north to the rear with a pool – and [is] priced well. Vendors have to be realistic.”
She says that, in other suburbs of Sydney where buyers are more affected by interest rate hikes, it’s likely a different story.
“There will be parts of Sydney where this isn’t the case. There are areas where the stock is low but the demand from buyers is also low.”
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