The winter cold has certainly not frozen the housing market. There has been a strong rise in the number of homes coming on market – almost 13% more in fact than were up for sale at this time last year official figures show. From a buyer’s agency point view this is making life exceptionally challenging for the every-day buyer for whom finding a property on their own is now like looking for the proverbial needle in a haystack.
The evidence is cropping up in conversations with would-be buyers as well in the behaviour of auction-goers. “There are still a lot of potential buyers around,” said Rose Buyers Agents CEO Simon Rose. “But what we are finding is that in the past several weeks while people want to buy, when it comes to the crunch, they are lot less likely to put in offers and actively participate in bidding.”
This wait-and-see approach does, however, mean a growing market of buyers who would benefit from professional advice. They will also be looking for reassurance. Affordability is now higher on their radars than ever thanks to the seemingly never-ending upward trajectory in property prices. Latest CoreLogic figures show Australian dwelling values rose 0.8% during May to mark the 16th consecutive month of growth.
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Compounding this is a continued fear around a potential rise in interest rates, Mr Rose said. Sydney’s auction clearance rates posted last weekend (June 9) and the week prior were 65% - down from 75% earlier this year. Some agents are even saying that the market is weaker than these numbers suggest. But the Reserve Bank of Australia is not expected to increase the cash rate when it meets next Monday and Tuesday, and the message needs to be conveyed to buyers that rates have now been stable for a good several months.
“The buyers we have seen lately are a very mixed bag,” Mr Rose said. “On one hand we have many cashed up buyers who have just sold and don’t want to wait at all before they buy another property, and for them we are having absolutely no problem finding them what they want. And on the other side are those who are sitting on the fence and they are the ones that we are now reaching out to – as the irony is there is more stock across the board than there has been in quite a while and therefore greater opportunity than even two months ago to find them what they’re looking for.”
What’s more, the growth in homes being put on the market is being driven not only by Sydney’s property market but by Melbourne and Canberra’s too. New listings in those three markets are up between 30% and 42%, while new listings are higher year-on year in all other capitals except Hobart. Furthermore, economists are forecasting it will be at least 18 months before prices stabilise due to the larger volume of transactions at the higher end of the market. Even the more reason to encourage those many fence-sitters of the benefit of professional advice and access to off-market properties.