The buzzword from agents this spring selling season? 'Uncertainty'

Spring has traditionally been the party season for the real estate market, with vendors sprucing up their homes ready for sale and buyers venturing out into the sunshine in the hope of a fresh new start.

But this year is special. Although the number of listings and potential buyers’ views for each are just starting to rise, there’s never before been so much uncertainty in the industry threatening to smother the festive mood.

“Uncertainty is the biggest killer in the market today,” says Andrew Cocks, managing director of Richardson & Wrench. “We have uncertainty about interest rates, about the cost of living and about inflation and when you add that to the general lack of affordability, it’s having a dampening effect right across the country.

“I think, as a result, this spring is going to be a lot more sober than usual. There’ll be a lot more balance between buyers and sellers.”

The phrase agents now hear regularly from both sides of the market is, “Let’s wait and see.” It isn’t exactly inspiring confidence.

“Those words are the worst ones an agent can ever hear,” says Peter Kudelka, executive director of Kay & Burton. “It means everyone is just sitting on their hands, waiting. 

“It makes it so hard to predict what’s going to happen with the spring market this year. We now have to factor in so many factors, like rates, inflation, even what’s happening in markets overseas.”

Most people now seem to expect interest rates to stay on hold for most of the rest of the year, with a drop either late this year or sometime in the first quarter. They’re factoring that into their reckoning but are still fearful of a possible rise while hopeful of an earlier fall.

However, more are starting to realise that if the Reserve Bank of Australia lowers the cash rate, prices may well rise again under the pressure of unleashed demand, and maybe they’re better off trying to buy sooner rather than later. 

Elevate your living experience with our digital magazines

Browse Domain’s property and lifestyle magazines.

Read now

“Prices might not rise with the first rate cut, but if we get two or three in quick succession, that will definitely have an impact,” says John McGrath, chief executive of McGrath Estate Agents. “Prices will go up. 

“At the moment, we’re seeing buyer activity slightly subdued but the trajectory of listings is on the up and we could see a fairly significant rise over the next 90 days.”

Spring’s bounty could well scatter differently around the nation, too. Over July, LJ Hooker’s head of network for Australasia, Chris Keating, says that listings rose by 28 per cent in Western Australia, 22 per cent in the ACT, 20 per cent in NSW and 12 per cent in Queensland, with little increase in Victoria.

“I think there is a lot of uncertainty that’s been keeping the market subdued, with stock tight. But, I do think the mood is starting to change as spring gets closer and people are thinking that this might be the time to jump in,” Keating says. 

“In NSW, people see rates on hold, which gives buyers more confidence, although Victoria is definitely a bit behind the rest at the moment. Numbers have plateaued there for a while and I think they’ll be one of the last to check in for the spring selling season.”

Melbourne has a fair few landlords putting their investment properties on the market after changes in rental legislation, while there is the start of an uptick in general listings in Sydney, says Nick Boyd, Belle Property’s head of growth. 

“There are still plenty of buyers around, but they’re more cautious,” he says. “Good calibre property in the best locations is doing well, but those on, say, a busy road or that have another flaw, are a bit challenging.”

Sydney and Brisbane are the two cities struggling the most with a shortage of stock, advises Charles Tarbey, chair of Century 21 Australasia, with Perth is also under-supplied, which helps explain its stunning 23.8 per cent house price rise over the past year, on Domain figures. 

“A lot of our conversations around both buyers and sellers are now around interest rates and their likely movements,” he says. “A lot of people are hanging out to see what will happen. 

“Buyers are sellers are pretty well balanced at the moment, and until interest rates go down, the number of buyers won’t rise, and we’re not seeing many new sellers coming through for spring. It’s like the seasons are less important now than they were pre-COVID.”