This Weeks Property Market Update
Weekly Real Estate Market Update
Property prices continue to surprise the market, and as of mid-May prices are up nationally by 0.6% across our capital cities. I noticed that the last interest rate rise combined with the federal budget being announced buyer confidence lowered, however, over the past week buyer numbers are up. On the Sunshine Coast, we’ve seen some amazing prices being achieved for A-Grade properties. Others are taking a little longer, however, in most cases, offers are coming in within the first week or two. With further rate rises predicted it’s hard to know what the market may do.
The lower segment of the market continues to lead the way as far as price gains are concerned, and the main reason for this is due to relative affordability. However, there has been a slight pick-up in recent months in both the mid and top-tier ends of the market. And overall prices are still well up in most demographics from pre-covid levels. If auction clearance rates are anything to go by, it looks like we are in an improving market. The revised auction clearance rates for the past week were 69.9% compared to last year at 60.1%. And what’s more amazing is the number of homes that went to auction. There were 2789 dwellings up for auction this time last year compared to 1724 last week. Fewer homes for sale, when buyer sentiment is down, seems key in keeping prices from falling.
The chart below shows the shortage of properties being listed for sale continues downwards. This would indicate that seller confidence is low. Keeping in mind sellers are buyers, and when there is a lack of property options for them to purchase, most will hold off selling until more becomes available. When buyer sentiment improves, we will start to see more property owners list their homes for sale.
The experts are suggesting that interest rates will rise one or two more times this year. I think after 11 consecutive rate rises many mortgage holders are going to feel the pinch. However, if only 30% (approximately) of Australians who own property have a mortgage there are many more that don’t. Only mortgage holders feel the pinch while the rest continue spending. Not sure this helps with inflation, but I suppose it all has a flow-on effect. The other side to this equation is that more first-home buyers are pushed out of buying and forced into renting, and this, combined with increased interest rates, continues to push up the rent. Not so good for lowering inflation. So rate rises are kind of a double-edged sword and I expect, to avoid a recession we may see the RBA ease back on the rates towards the end of the year. If that happens, the pent-up demand is going to cause a slight boom in the market. Of course, I could be wrong. However check out the chart Matusik dug up this week showing the 18.6 year property cycles. If this play out true, now is a great time to buy. Holding off until interest rates ease could be detrimental.
AUCTION CLEARANCE RATES
- Queensland – 48% (189/1097)
- NSW – 64% (788/1741)
- Victoria – 66% (790/1217)
- ACT – 68% (79/108)
- South Australia – 76% (74/318)
- Tasmania – NA (0/178)
- Western Australia – 26% (19/711)
- Northern Territory – 50% (2/26)
REVIEW(S) OF THE WEEK
Getting it done!
Big thanks to Leigh, Tash and the team at MPG for making the purchase of our new home so smooth and seamless! Your professional and prompt service and communication, combined with great local knowledge made becoming a homeowner an enjoyable experience. – Buyers