Local Buyer FRENZY is Underway
Weekly Real Estate Market Update with Leigh Martinuzzi MPG
In the last two weeks, we’ve seen local buyer demand strengthen. While seller conditions have continued to remain strong over the December and January months, we did see a slight decrease in the amount of buyer activity on advertised properties. Now, there seems to be a bit of a buyer frenzy happening. Of course, this is good news for those selling, however, one point we’ve noticed is that buyers are more cautious of where they put their money. Once again, making sure the property represents good value to them and not just buying on the back of FOMO. The good news for buyers is that there seem to be more properties to choose from.
Nationally, prices in Sydney and Melbourne continue to flatten. Melbourne recorded a 0% gain while Sydney saw prices retract by 0.2%. Considering 60% of all sales in Australia take place in these two capital cities, Sydney and Melbourne, we can only expect slowdowns in these markets to have a direct effect on national real estate markets. I see Australian property as very much transitionary, people selling property for high gains in one market and then buying a comparable or suitable home more affordably in another market. Therefore, if they are not making expected gains when selling in Sydney or Melbourne, they may be less willing to pay a premium when moving to a new area?
With recent comments from the RBA, we can expect to see interest rates rise in the latter half of 2022. With rising constructions costs we have also seen new home prices rise, and this is putting inflationary pressure on existing home prices. These may be two reasons why we are witnessing a slowing property market in our southern states. However, Queensland property sales continue to perform well with Brisbane prices seeing a further gain of 0.5% this past week and on track to hit 2% growth in February.
A strengthening labour market and lower unemployment are helping keep the property market here afloat. According to the ABS, the unemployment rate is currently at 4.2%, and the government expects it to drop to below 4% sometime soon. A tightening labour market may help push wages up and therefore mean many will be able to afford increased costs of goods and mortgage repayments even with rising interest rates. We also have the opening of international borders to contend with. An increasing population will likely create more demand for housing and therefore keep prices firm while, on the other hand, it may stabilise the labour market shortages and soften wage growth.
One will expect demand for housing in our capital cities to slow as affordability constraints restrict many. In search of affordability, buyers will be forced to seek out unit accommodation in the inner city, or housing accommodation in outer city suburbs or our regional areas. CoreLogic suggests that housing in the range of $600,000 to $1,000,000 will be hot throughout 2022. Locally we have witnessed properties within this price range sell extremely well. Over the last 12-18 months, the Sunshine Coast property values have risen anywhere from 25% to 100%, and at the current rate, we may see property with here rise a further 20%.
AUCTION RESULTS STATE BY STATE (PRELIMINARY). WEEK ENDING 20TH OF FEBRUARY
- Queensland – 79% (119/1451)
- NSW – 89% (672/1755)
- Victoria – 85% (933/1483)
- ACT – 87% (106/73)
- South Australia – 87% (83/381)
- Tasmania – NA (0/195)
- Western Australia – 80% (5/802)
- Northern Territory – 100% (4/36)
Review of the Week
Professional with great local knowledge
“Living and working in Palmwoods was a significant factor in our choice of agent. Leigh provided accurate and timely advice throughout the sale process. He kept us up to date with queries and feedback from potential buyers. We are very happy with the service provided by Leigh and his team, from the initial price estimate to the settlement of the contract.” – Palmwoods Seller