Weekly Real Estate Market Update with Leigh Martinuzzi MPG
Overall, the decline in property prices across Australia continues to ease. Nationally, prices are down just -2.2% over the last 12 months. Sydney and Melbourne have incurred a year-on-year loss of 7.6% and 4.9% respectively, while Brisbane remains in the positive territory, up 11.1% year-on-year. On the Sunshine Coast, while the figures may not be 100% accurate, some reports I’ve read suggest annual price gains of anything between 5.5% and 11%, with a slight drop in prices over the last few months of anything up to 5%. Again, I don’t think we’ve seen a price drop necessarily; I believe prices are no longer inflated, due to the increased buyer activity we experienced in the booming market.
In my local areas of Palmwoods, Woombye and the surrounds, buyer demand is steady and urgency to buy is weak. This means properties will sit on the market for longer to find the right buyer. Pricing expectations may also need to be adjusted. While I am still seeing some great prices being achieved for some properties and in very quick succession, others are not reaching vendor expectations. Prices that may have been possible 6 to 12 months ago need to be reassessed. I feel to successfully sell a property in this market property owners need to adjust their expectations by 5% from what would have been considered fair value this time last year. The pricing and marketing strategy also needs careful consideration so as to attract as much interest as possible to the property while also creating a sense of urgency.
A chart below provided to me by Matusik highlights buyer trend forecasts heading into 2023. As highlighted, with the increasing interest rates expected to continue, interest from first-home buyers will decline. Interest from investors may increase slightly, as prices in some areas will drop, meaning the rental return on investment will be better. We will also see a revamp in international buyers and immigration numbers improve. The other chart shows us the moving trends as to what buyers think is important when buying property. Critically, the amount they can borrow will remain of high importance, while other factors like being in a regional area or having a dedicated work area is less important than it was during COVID. The buyers that I’m dealing with do appreciate extra living areas indoors and out, work-from-home spaces are important, while private and quiet locations are also key. Neat and tidy well-presented homes, in need of renovation or not are still attracting the best interest.
Also, making news headlines this week was the rise in construction costs. In the 3rd quarter of 2022 building costs rose at a historic record rate. According to Cordell Construction Cost Index, residential construction costs have risen by 11% over the last 12 months. And the September quarter was 4.7% above the previous quarterly rise recorded at 2.4%. I expect this will put some affordability constraints on buyers who may have been looking to build and will likely push more buyers towards buying established homes.
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Pricing a property
AUCTION CLEARANCE RATES – WEEK ENDING 21ST OF AUGUST 2022
- Queensland – 36% (257/1184)
- NSW – 55% (863/1482)
- Victoria – 59% (742/1133)
- ACT – 60% (84/87)
- South Australia – 66% (108/312)
- Tasmania – NA (0/164)
- Western Australia – 13% (15/676)
- Northern Territory – 25% (4/21)
REVIEW OF THE WEEK
Best real estate agent we have dealt with out of 14 property sales
Leigh is not a Salesman. He is a highly professional marketer who is enthusiastic, organised, hugely knowledgeable of his profession and an asset to the industry. We now fully understand why he is streets ahead of any other agent in his area. You deserve to do as well as you do Leigh. Well done! – Seller