Market wrap: spring selling season kicks off

As the sun shines brighter and the cold weather retreats there’s been a seasonal uptick in market activity, with sales volumes up compared to the end of winter.

But when compared to last year’s record-breaking spring selling season, PropTrack senior economist Eleanor Creagh said the picture looks quite different.

The good news for buyers, she said, is it’s expected to be much less competitive than last year.

“There’s a lot more choice and less competition, which could create opportunity for some,” Ms Creagh said. “Particularly in Sydney and Melbourne where we’ve seen the largest increase in options.” 

“The balance in market conditions could make it easier to get into the market, stock isn’t moving as quickly and the fear of missing out has subsided.”

Preliminary weekly sales volumes have increased in recent weeks, although Ms Creagh said they are 14% lower than the same time last year.

“Spring typically brings a busier period for the property market. There's usually a pickup in new listings and buyer activity,” Ms Creagh said.

“However, this year interest rates have risen at a fast pace and home prices are falling around the country, contributing to slower selling activity compared to last year.” Ms Creagh said.

“In addition, uncertainties remain around where interest rates will land which will see some people delay their decisions to buy and/or sell.

Interest rates impact

The Reserve Bank of Australia raised the cash rate by another 50 basis points to 2.35% in September, and buyers are feeling the squeeze on their borrowing capacity.

Ms Creagh said the most expensive markets of Sydney and Melbourne are leading the price declines.

‘’Tuesday’s rate hike will further increase borrowing costs and reduce maximum borrowing capacities, pushing property prices further down,” Ms Creagh said.

“And in the period ahead the level of interest rates will be a key determinant of housing market conditions and the pace and depth of home price falls.”

The latest PropTrack Home Price Index shows national property prices have fallen 2.7% since the March peak.

Auction activity

Auction activity has picked up with more than 1500 auctions held across the country over the first week of spring, according to figures from PropTrack.

“But clearance rates are low, hovering around 50% in recent weeks,” Ms Creagh said.

“That’s lower than the clearance rates seen earlier this year or in spring last year.”

Melbourne auctioneer Jason Lien said winter was particularly slow and it hasn’t quite rebounded yet.

‘’Last Saturday, we called nine auctions, usually we call anywhere between 20 to 30 auctions on weekends,” Mr Lien said.

He said that’s due to a combination of interest rate activity as well as increased apprehension among buyers.

“It is initial hesitation among buyers and finance is tough,” Mr Lien said. “They are still bidding, but we're just not seeing crazy bids over reserves.”

Looking ahead though, he said the outlook is a little more promising.

“We are seeing auction listings come back now with 15 to 20 auctions each weekend for the next four to six weeks” Mr Lien said.

More choice for buyers

The number of listings on realestate.com.au are up almost 5% compared to a year ago.

Sydney and Melbourne have seen the biggest increase in properties available.

In Perth, real estate agent Tom Carlin from Carlin Team said the new season had delivered a boost of both buyers and those looking to sell.

‘’We have definitely seen a lot more enquiry coming into the office with requests for appraisals really picking up,” Mr Carlin said.

After four months on the market, Mr Carlin said enquiry had skyrocketed in the past week for a three-bedroom home listed in Perth’s south.

“Enquiry on that one listing literally quadrupled over the past week and a half,’’ Mr Carlin said.

It’s now under offer.

He said new properties were also being snapped up quickly, with another home selling in just days.

“We had five offers on that property and that got a great result because it was on a 284 metre square block.”

In the first week of spring, Brisbane and Canberra saw the largest pick up in preliminary weekly sales, whilst the uptick was much smaller in Sydney and Melbourne and flat in Hobart, Ms Creagh said.