Opportunity knocks: Property hotspots flying under the radar

2 weeks ago 11

A surge in homes for sale and a fall in property searches in a handful of suburbs has created opportunities for buyers, with fewer people competing for a greater number of homes.

In some suburbs, the number of properties on the market has doubled compared to the same time a year ago, PropTrack data shows, with the increased supply of homes giving buyers more choice.

Over the same period, property searches in these suburbs have declined, indicating easing competition for buyers in a market characterised by elevated demand and strained affordability.

Property searches across Australia have increased over the past year as strong population growth and tight rental markets encourage more people to buy a home.

There was a particularly large jump in searches in relatively affordable areas experiencing big population increases amid a shortage of property listings, including many suburbs of Perth, with prices poised to rise further in sought-after areas.

But while competition has been fierce in many markets, conditions may have eased in areas that have slipped off the radar of many property seekers. 

This has potentially tipped the balance of supply and demand in buyers’ favour, according to PropTrack economist Anne Flaherty.

“A market in which the number of homes for sale is rising relative to the number of buyers looking, is one in which conditions are becoming more favourable for buyers,” she said.

“More listings means more choice for buyers while, at the same time, a decrease in searches implies less competition.”

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Ms Flaherty said the number of homes listed for sale across the market was well up compared to the same time last year, which is largely due to an improvement in buyer and seller confidence.

“Expectations that interest rates have peaked and may even decline over the next 12 to 18 months mean buyers feel more confident around their future repayments,” she said.

“Given many people sell before buying, this is supporting listings.”

There are many more properties on the market than a year ago in several inner suburbs like Turner in Canberra, where this three-bedroom townhouse is going to auction. Picture: realestate.com.au/buy

On the flip side, a rise in distressed listings could also be contributing to the higher number of homes for sale, Ms Flaherty said.

“The magnitude of the interest rate rises seen over 2022-23 mean more homeowners are struggling with repayments, and some may now be in a situation where they are forced to sell.” 

“Among the hardest hit are those who bought in 2021 when prices were high and interest rates were low.”

Where property listings are up but searches are down

Source: PropTrack. Suburbs ranked by % increase in total listings from February 2023 to February 2024.
SuburbStateYoY change in listingsYoY change in searches
9Safety BeachVIC52%-11%
10The PondsNSW50%-18%

The suburbs where the number of homes for sale increased while searches decreased were found in the cities where property listings were up overall, namely Sydney, Melbourne, Canberra and Hobart.

Several of these suburbs feature many recently built homes, with a boost to supply not only helping to improve choice and ease competition, but offering buyers newer properties too.

Meanwhile, in Perth, Adelaide and Brisbane, there is a shortage of homes for sale relative to the high demand for homes, and competition between buyers is still heightened in most areas.

Where inner city apartment buyers are spoiled for choice

In the cosmopolitan suburb of Alexandria in Sydney’s inner south, there were 52% more properties for sale than a year ago, according to PropTrack data, but 6% fewer searches.

While the suburb has a diverse array of housing, it’s dominated by apartments, many of which have been built recently on former industrial or commercial land.

In Alexandria, where many former commercial and industrial sites have been converted to residential, the number of homes on the market has increased, giving buyers more options. A two-bedroom apartment with city views in this building is on the market now. Picture: realestate.com.au/buy

Local real estate agent and MGM Martin director David Bettini said the increasing supply of new apartments in the area had driven more turnover, particularly among investors.

“What affects our marketplace is supply, so obviously if you have the same amount of buyers and a lot of new apartments coming into the market it does keep a little bit of a lid on prices,” he said.

“What you're seeing is a lot of investors getting out of apartments in the area. There hasn't been a lot of movement in prices because of the increase in supply.”

With the number of houses on the market in the area still tight, apartments offered a more affordable alternative, Mr Bettini said.

“You can get really quality living accommodation in a great location for a reasonably affordable price.”

The supply of new apartments in the area was slowing down, as much of the available land had already been developed, Mr Bettini said.

“When that supply tap turns off I really think you're going to see a sharp increase in prices.”

In Canberra, a similar spike in property listings has given buyers more choice, particularly those targeting recently-built apartments and townhouses.

Canberra buyers seeking centrally-located apartments will have plenty of luck, with listing numbers well up compared to a year ago. A modern one-bedroom apartment in this building is on the market now. Picture: realestate.com.au/buy

The city has been a buyers' market for much of the past year, with prices remaining relatively flat as the number of properties on the market increased by 29%, according to the latest PropTrack Listings Report.

Close to the CBD, there were plenty more properties for sale than a year ago in Turner (up 60%) and City (up 54%), but searches were lower.

In the city’s northwest, listing numbers more than doubled in Belconnen, where the vast majority of properties are units, many of which were recently built during the city’s latest construction boom.

The number of homes on the market in Belconnen is twice as high as a year ago due to more investors selling amid higher interest costs. Picture: Getty

Over the same period, property searches decreased 14%, indicating less competition for the increased number of homes available.

There was a similar increase in homes for sale in nearby Bruce, which is also dominated by apartments, while searches decreased 22%.

High interest rates have prompted more investors to sell, especially those with expiring fixed rate mortgages, and the increased stock levels had given buyers more negotiating power, according to real estate agent Alex Wang of Archer Canberra.

While there are twice as many listings on the market in Belconnen compared to a year ago, apartments in desirable buildings with views, like this two-bedroom northeast facing apartment, are still selling well, according to real estate agent Alex Wang. Picture: realestate.com.au/buy

“Generally speaking buyers have more options now, so they can at least get a chance to choose, and talk about the price,” he said.

“It still depends on the property. If it has good views or the building is popular, they’re still selling very fast and buyers need to compete, increase offers, and exchange contracts quicker.”

“But if properties are sitting on the market for a longer time, usually it's because of the price.”

Outer suburbs where buyers have more options

Many of the suburbs with more homes for sale and less people searching are found on the fringes of the capitals.

There were 50% more properties for sale in The Ponds in Sydney’s northwest, but an 18% reduction in searches indicated that conditions could be getting a little easier for buyers.

Listings are up but searches are down in The Ponds in Sydney's northwest, where many recently-built homes are for sale, including this four-bedroom house. Picture: realestate.com.au/buy

The master planned suburb located about 34km from the Sydney CBD was developed over the past few decades, and is made up entirely of houses or townhouses, with a median home value of just under $1.6 million, according to PropTrack data.

In Melbourne, Templestowe in the outer northern suburbs had a 52% rise in listings, while searches reduced 6%.

Local real estate agent and Jellis Craig Doncaster director Andrew Keleher said listing numbers in the tightly-held suburb had increased as older homeowners downsized and new homes were built.

Rising turnover in Templestowe is giving buyers more options, with large properties like this five-bedroom luxury home offering good value, according to local agents. Picture: realestate.com.au/buy

“There’s still a lot of baby boomers in Templestowe that have gone through Covid, hanging on a few years longer than they wanted to, so we’re seeing a lot more people selling,” he said.

“Templestowe is still a bit of a well kept secret. It’s incredible value for money, has beautiful treed areas and lots of parklands, and it’s just a great family suburb.

“It offers more bang for your buck if you’re coming from the inner suburbs. A lot of people don't have $4 million to spend in an inner suburb, but can buy an equivalent home in Templestowe for $2.5 million.

“As much as stock is up, demand is still very strong. I definitely don't think the stock has caught up with demand, but it was off a very low base."

While Templestowe is traditionally tightly held, more long-held homes are starting to hit the market, like this five-bedroom home on an acre of land. Picture: realestate.com.au/buy

Safety Beach on the Mornington Peninsula had a 52% rise in listings and an 11% drop in searches.

Local real estate agent and Scenic Property director Matt Carroll said this was due to more people selling holiday homes due to higher interest and land tax costs.

Holiday home hotspot Safety Beach on the Mornington Peninsula has had a rise in listings over the past year. This waterfront house is on the market for $2.75 million. Picture: realestate.com.au/buy

“With cost of living pressure, it’s not viable for a lot of people to hold these second residences,” he said.

More owner-occupiers were buying in, he said, with turnkey homes selling quickly but properties needing renovations that were priced too high were taking longer to sell.

While listing numbers are up, demand is still strong for turnkey homes, like this four-bedroom house at Safety Beach. Picture; realestate.com.au/buy

Meanwhile, Claremont and Brighton in Hobart’s northern suburbs had an influx of listings on the market, but fewer people searching.

Claremont has a median house value of $527,000, while Brighton’s is $559,000, meaning properties are significantly more affordable than the rest of Hobart.

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