The difference a year makes: Last year's property market versus this year's market

This time last year, the run up to the Easter holidays was anything but normal.

Australia’s property market was in a state of desperate frenzy. Auction clearance rates along the eastern seaboard were at record levels.

Every single capital city was being flooded by new listings as vendors jumped at the chance to sell in a booming market – but even still, the supply of property for sale was no match for the insatiable level of buyer demand. FOMO was pushing prices to unthinkable heights.

Agents were so busy they were booking auctions back-to-back on Saturdays and Sundays just to cope with the level of demand from buyers and sellers, with some reporting they were booked out for auctions until July.

A run of public holidays and cooler winter months were on the horizon, but instead of slowing down, the property market was preparing itself for a “second spring” to cope with the extraordinary momentum sweeping the nation’s property markets.

The lead up to Easter 2022 is looking very different.

Australia’s capital city property markets are no longer moving in the same direction. Some, like Sydney and Melbourne, have peaked and are now softening. Others, like Brisbane and Adelaide, are still rising – but will they keep rising into what are traditionally the quieter months of the year? And is Perth showing signs of rising now that its borders are down?

The latest data from Domain details the volume of new property listings, auction clearance rates over the past week and the percentage change in open home check-ins – and it has revealed a patchwork of results for Sydney, Melbourne, Brisbane, Perth and Adelaide.

SYDNEY

New property listings are rising again leading into Easter but the difference between this year and last year is the buyers.

“FOMO is no more. Buyers are taking their time and contemplating decisions. They are not willing to make a compromise like they were last year,” said Nicola Powell, Domain chief of research and economics.

“This is creating much better buying conditions for rational decisions to be made. Market dynamics are more balanced compared to 2021 and continue to shift to favour buyers.”

Sydney recorded its lowest Saturday preliminary clearance rate so far this year last weekend – 66 per cent – and the weakest since the market closed on December 18, 2021.

Forty per cent of properties were sold prior to auction and 11 per cent were passed in. The median auction price last weekend for a house was $1.8 million.

Dr Powell said buyer depth would be tested this coming weekend, Saturday April 9.

“This is set to be the busiest weekend so far this year with a Super Saturday of more than 1100 auctions,” she said. “After this coming weekend, the auction activity slows down for Easter.”

While there are a number of market metrics showing a slowdown in Sydney’s housing market, Dr Powell said there were some areas that had seen an increase in average open home check-ins, indicating rising interest in the lead up to the Easter holidays.

Dr Powell said the biggest weekly lift in new listings was for units, rather than houses.

“This is good for affordability and will help to service the rising investor demand,” she said.

“The areas seeing the biggest weekly lift continue to be concentrated in the popular outer areas [since the pandemic]. This could be a sign that homeowners are wanting to reap the capital growth while selling conditions remain favourable.”

MELBOURNE

Melbourne saw the strongest rise in new property listings out of any capital city last week, jumping by 12 per cent.

The biggest weekly lift was in unit listings, which Dr Powell said was good for affordability and would help to service the rising investor demand.

“Investors could become an even bigger buyer pool as the rental market has tightened,” she said.

She said some of the biggest increases in new listings had been in the inner areas of Melbourne, which could indicate homeowners wanted to sell while conditions remained fairly favourable.

While Melbourne’s preliminary auction clearance rates this time last year were around 80 per cent, they are currently holding around the high 60s, which Dr Powell said demonstrated better purchasing conditions for buyers.

Last weekend’s preliminary clearance rate was a strong 67 per cent, with 11 per cent of properties withdrawn and 22 per cent sold prior. The median auction price was $1.125 million for a house and $730,000 for a unit.

Like Sydney, Melbourne’s auction market will also be put to the test this coming weekend, Saturday, April 9, which is set to be the busiest weekend so far this year.

Almost 1500 properties will go under the hammer but Dr Powell said auction activity was likely to slow down in time for Easter.

Despite Melbourne’s slowing market, there are particular areas where buyer interest is still strong.

“Port Philip is particularly interesting given it has seen one of the biggest weekly increases in new listings as well as average check-ins per open home, suggesting buyer competition hasn’t been eased by the recent uptick in listings,” Dr Powell said.

BRISBANE

This time last year Brisbane’s property market was in a frenzy. The number of new property listings was increasing prior to Easter but the competition from buyers was so fierce it was putting some home owners off listing at all.

Brisbane was only just hitting its stride, though, and the momentum that swept across the city in early 2021 gathered pace as the year unfolded, until the river city closed out the year as Australia’s strongest property market.

But it’s been a tumultuous start to 2022 for Brisbane as a city. While the floods acted as a circuit breaker to what was a white-hot property market, the data shows that the market is still strong going into Easter, just at a less frenzied rate.

New listings declined by 8 per cent last week, which means there are fewer properties for buyers to choose from. Fewer properties mean more competition.

Buyer interest is still strong, too. Areas like Holland Park and Nundah have had some of the highest upticks in open home numbers in the entire city.

Last weekend’s preliminary auction clearance rate lifted to 67 per cent, and only 11 per cent of properties were withdrawn from the market – a big improvement on the week before when the clearance rate was 56 per cent and 27 per cent of homes were withdrawn from auction.

“Overall the Brisbane market remains competitive,” Dr Powell said. “There are particular areas in Brisbane that are seeing a rising interest in the lead up to Easter, with the average check-ins per open home increasing over the past weekend, perhaps indicating where we will see stronger levels of buyer competition.”

“Nundah is particularly interesting given it has seen the biggest weekly increase in new listings as well as average check-ins per open home, suggesting buyer competition hasn’t been eased by the recent uptick in listings.”

Harcourts agent and auctioneer Patrick Ivey said buyer demand for properties that were renovated or newly built was “unbelievable”.

“The interest in these properties is huge and there’s a lot of competition,” he said. “A new build at 6 Vickers Street, Carina, recently sold for $2.75 million. I thought it would go for around $2 million. Buyers cannot get enough of the homes where there’s no work to do.”

ADELAIDE

Adelaide was a little slower to boom than other capital cities like Sydney and Melbourne but once it got going, it kept going, and today it is one of the best-performing markets in the nation.

“The spotlight remains on Adelaide,” Dr Powell said.

This time last year the number of new property listings was rising into Easter but this year, the supply of new stock for sale is tight – new listings fell by 20 per cent last week – and competition for property is still strong.

Adelaide still has the highest preliminary auction clearance rate of any capital city, with last weekend clearing 75 per cent of properties.

There are certain parts of Adelaide where more new listings are hitting the market. Most of them are in Adelaide’s more affordable locations where the median price is below that of the city’s as a whole.

There are particular areas in Greater Adelaide that are seeing rising interest in the lead up to Easter, with the average check-ins per open home increasing over the past weekend, which Dr Powell said indicated where the stronger levels of buyer competition would be.

Adam Farrelly of Century 21 Paterson said Adelaide was still performing well but the desperation and urgency that was in the market last year had dissipated slightly.

“We’re still getting amazing prices for our sellers – we just sold a property for $70,000 over its asking price – but we’re having to work a bit harder for it,” he said.

“There are a few subtle differences that have started creeping in over the past four weeks. Subject-to-sale offers are popping back up now, and we haven’t seen those in a long time.

“The groups we’re getting through open homes have dropped. We’re thinning out a bit. So we’re still really strong but just that urgency that was there isn’t there anymore.”

PERTH

The Perth market has, quite literally, been hot, according to Thomas Jefferson Wedge of Ray White Dalkeith Claremont.

“I’ve got a lot of people listing now and launching their properties after Easter but I would say the buyer appetite has been a little less exuberant than it has been,” he said.

“We’ve had some extraordinary heat here, and that makes a difference to people’s behaviour. Now that it’s starting to cool down a bit, people are willing to leave their houses and look at property again.”

New property listings declined slightly last week but that came off the back of a flood of new listings to the market over the past three weeks, Domain data shows.

The areas with the biggest weekly lift in listings are a mix of price points, from Fremantle – which has the second-highest median house price of Greater Perth’s SA3 areas – to Kwinana, the most affordable location.

This diversity will help to service demand from a variety of different price points.

There are particular areas in Greater Perth that are seeing a rising interest in the lead up to Easter, with the average check-ins per open home increasing over the past weekend.

Mr Jefferson Wedge said Perth had gained momentum since the borders had reopened.

“A lot of people are listing; they’ve been listening to all the good news about the property market and feel confident,” he said.

“For buyers, there’s some who are afraid of overpaying but they’re also afraid of rising interest rates and want to lock in with a two-year fixed-rate mortgage now, before rates go up. That’s also keeping them active.”