After a couple of years of strong winter activity in the Australian property market, experts are heralding the return of Spring.
Both McGrath and Ray White have recorded an increase in the number of listings nationally as the country heads into what is commonly thought of as the most popular season to buy and sell property.
BUYER OPPORTUNITIES
Real estate guru John McGrath said the surge in listings will create more choice for buyers all the way up until Christmas. He also said prices will likely soften momentarily as buyers wait for the first RBA rate cut before making their move.
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McGrath Estate Agents CEO John McGrath. Picture: supplied
“I think in the absence of any rate relief, we’ll probably see buyers being a bit more cautious over the next six months,” he said.
Buyer demand across the eastern seaboard has already dropped since last year, with the number of people attending open homes falling from an average of 15-25 down to six to 12, and auction clearance rates hovering between 60-70 per cent, back from 75 per cent last year, he said.
Ray White head of performance and recognition Bianca Denham said a drop in buyer demand is already dampening price growth across Melbourne, Sydney, Hobart and Darwin while growth in Brisbane, Perth and Adelaide is starting to slow.
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Ray White head of performance and recognition Bianca Denham.
“What we’re hearing from agents across all market segments is that there’s less buyers inquiring on each piece of stock,” she said.
Contrary to the drop in buyer numbers noted by Ray White and McGrath, property researcher and founder of Hotspotting Terry Ryder said demand remains strong across the major markets, with the most recent lending figures showing both a quarterly and an annual increase in loans to home buyers and investors.
He said sales activity has been particularly strong in the rising markets of Perth and Adelaide.
DANGERS OF SPRING
Buying recklessly in a booming market is one of the biggest dangers buyers should be aware of, Ryder said.
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Hotspotting founder Terry Ryder. Picture: Supplied
“That’s been very prevalent in Perth, where people have been just grabbing anything they can find, paying above the asking price, signing contracts without conditions, no pest and building inspections – just crazy stuff,” he said.
Not having a realistic sales price is the biggest danger for sellers, he said.
“We still have those old tricks in the industry where the agent will overquote to get the job and then condition the vendor, once they’ve got the job, to accept a lower price,” he said.
Denham said sellers who only purchased their property six to 12 months ago face the danger of selling for less than what they paid for.
Sellers who have only recently purchased could be at risk of negative equity. Picture: NCA NewsWire / Max Mason-Hubers
But those who have held their property for five years or more will likely get a good result this spring, even if price growth comes back a bit.
“The price growth we’ve had over the last five years is just unheard of, unseen, unprecedented,” she said.
SPRING EXPECTATIONS
Property experts are expecting a return to the traditional spring selling season after a couple of years of stronger winter activity.
It’s nice to see the sunshine – and the better choice in homes for sale! Picture: Richard Walker
Here’s what to expect:
* More properties for sale – this will bring more choice for buyers and sellers needing a new home
* Less buyer activity – likely until the RBA makes its first interest rate cut, though still strong in some markets
* Softening of price growth – more choice for buyers tends to mean less favourable properties won’t be in demand and may sell for less
* Rise of apartments – Terry Ryder from Hotspotting said demand for apartments is rising due to affordability, location and a shift in lifestyle preferences
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