Prices Remain Strong as Buyer Demand Softens – Weekly Real Estate Market Update
Hello August! The year is just slipping away! On all accounts, the property market in Australia is still growing however there are definite signs of a tapering price growth trend. In July, Australian property prices grew by 1.6%, which has steadily reduced since March’s record high of 2.8%. Prices have risen in 2021 by 14.1% and 16.1% in the last 12 months. This is the biggest yearly growth since 2004. What’s to come?
Many leading experts are still suggesting a further rise in prices of 10% to 15% over the next 12 months. The biggest driver for this is due to the simple fact that supply simply cannot keep up with demand. Property sales are up 40% on the five-year average with an additional 145,000 dwellings sales this year above the previous year. On top of that, active listings are down 26% on the five-year average. Auction clearance rates in July sit around 70 to 75% and homes selling by private treaty are moving fast with minimal discounting.
Demand is softening and we are seeing this through slowing online enquiries and inspection numbers. Although the rate of growth is up, it is slowing and one main reason for this is that housing affordability continues to worsen pushing many “would-be” buyers out of the market. As lockdowns continue consumer sentiment declines. Also, much of the earlier COVID fiscal support has expired and so we expect buyer demand will settle.
It is expected that as soon as Sydney is released from lockdown, we will see a surge in seller and buyer activity. A flood of properties will likely hit the market and more options for buyers will become available. In Queensland, one of the only states to be seeing increasing buyer demand, we will also likely see more people come to the market as our lockdown ends and interstate buyers surge here and continue to offer attractive prices to secure property.
Although we remain in lockdown, there are many things you can do to prepare your home for sale if you are considering selling. My advice would be to try and beat other sellers to the market to help reduce the competition you may face. For buyers, be prepared and in a position to make good, strong offers for when that dream home comes up for sale. Have your loan approval sorted and start to speak to leading experts in your desired areas so you can be the first to be informed. Although it is August, the year is not over yet.
