Property market overview heading into spring selling season 2023
As the spring real estate season approaches, both buyers and sellers are gearing up for what promises to be an interesting market. The economic landscape including record high interest rates and a historic low in stock levels have created a question mark around demand and supply in all markets, while the prediction for property prices is that they will increase after a dip.
Up, down, and up again
Between May 2022 and February 2023, Australian housing values dropped by 9.1%. However, by April 2023, they began showing recovery with a 0.6% rise in March and another 0.5% in April, as reported by CoreLogic’s Home Value Index. Sydney led this resurgence with a 1.3% increase in April, accumulating a 3.0% increase since January. The top four capital cities also noted a rise over the quarter. Tim Lawless, CoreLogic’s Research Director, highlighted that the market is now past its low point. This resurgence in prices was linked to increased transaction volumes and an ongoing shortage of advertised housing stock, the latter of which is still the case.
Even with consecutive interest rate hikes and more anticipated, experts believe that property prices will maintain an upward trend. This is primarily because – while higher interest rates have reduced borrowing power –the limited housing supply continues to support price levels.
Higher prices could mean a busy spring
These higher-than-expected prices are actually correlated with more listings being brought to market. That’s because vendors who have been waiting on the market are seeing an opportunity to put their homes on the market to get the best prices. This vendor confidence has meant a counter-seasonal surge in new listings has been evident since mid-June, defying the traditional trend of reduced vendor activity during the colder months. Historically, new listings in the national housing market decrease by 5.2% from autumn to winter and increase by 9.8% from winter to spring. However, this year saw a 13.2% rise in new listings, predominantly influenced by a 17.9% surge in the capital cities. This week, according to Corelogic, activity is set to be 10.6% higher than the 1,929 held across the capitals last week and 17.5% above the level seen this time last year (1,816).
Supply is low.. for now
While most areas in Australia are witnessing an increase in new listings, especially the capital cities, the overall advertised supply remains constrained. A recent report from CoreLogic anticipates a potentially competitive spring selling season, given the rise in stock levels, which could lead to a deceleration in value growth if buyer demand doesn’t match up.
Lock it in
It goes without saying that navigating this season requires a strategic approach, so we’ve checked in with our experts Pete Wargent, Hayley Van De Ven, Matt Scafidi and David Webb to give you a guide.
Economist and Founder of BuyersBuyers
Understand the market’s temperature
When quality or desirable properties are listed for sale, there’s a rush of interest. Hence, it’s crucial for buyers to be well-informed and quick to act when more listings are released to the market.
Leverage government schemes
Before diving headfirst into the market, understand the available government schemes in your state. For first-time homebuyers, there are potential lending schemes and stamp duty concessions that could be beneficial. Also consider whether you’ll be impacted by new investor laws if you’re looking to purchase a property for investment.
Preparation is everything
Before hunting for homes, speak to a mortgage broker to gauge how much you can borrow, especially with rising interest rates. If possible, get preapproved so you’re ready to make an offer. Set a realistic budget and research locations and property types that align with it. You can start this search on Homely.
Anticipate the spring surge
While spring usually sees an increase in property listings anyway, this year the competition is predicted to be intense. Being prepared and decisive will give buyers an edge.
Hayley van De Ven
Principal RE/MAX Bayside-Results, Alexandra Hills, Mackay, Cleveland
Hayley’s advice to sellers is to not delay, you’re always better to sell in isolation than the competition and ensure that they look at the value adds of staging a home and presenting it in its best light to maximise their sale price.
Avoid the headlines
There is still strong interest in the market, open homes are well attended and contrary to the media’s reporting we are still seeing record prices all over the suburbs.
Be a savvy borrower
Ensure that pre-approval still exists because some banks are now not offering it so savvy buyers need to have another convo with brokers to not only get the best rate in market but that they actually do still have that pre-approval/see if things have changed with new bank protocols and interest rate changes.
Founder & Director of Abode Advocacy Group
A shift in spring for first home buyers
It’s anticipated that spring will bring a surge in property listings, which might normalise the market. This increase will provide more options for buyers, especially first-home buyers, which is great news for those looking to get a foot in the ownership or investment market.
Opportunities for investors
With higher volumes and normalised pricing on the horizon, savvy investors with liquidity could find golden opportunities.
Head of Industry at Homely
With all the uncertainty and misinformation out there, try and avoid chasing the market or conversely, waiting too long. Do your own research on the areas you’re interested in. If you’re on the fence about selling, bite the bullet – the market is strong right now.
Stock is questionable
Our housing stock levels have been quite low for three years now. Many are predicting this to change later this year, which could have a big impact on house prices. More supply will put downward pressure on house prices.
Whether you’re a buyer or seller, looking for your first home or a landlord, this spring promises to be a change in pace to last year’s. With so much information out there, it pays to align yourself with trusted agents and do as much research as you can before auction day. Good luck!
Sourced from Homely