Two-speed property market emerging as hot states power ahead through winter

Despite the influx in property listings, buyer demand appears to be keeping up - depending on where you look - with a two-speed market emerging across the country.

PropTrack economist Anne Flaherty said the increase in supply nationally was partly due to property price growth and good selling conditions.

“Vendors can have confidence that if they list at the moment, they're probably going to see strong buyer demand,” she said.

“And then on the other side of things, the fact that interest rates have held persistently high for quite some time now, together with the cost of living crisis, there is probably a bit of a rise in distressed sales as well occurring, which is also contributing to the number of homes sitting on the market.”

Melbourne's property market has been lagging behind other hot capital cities. Picture: Getty

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Nationally, property prices are continuing to rise, particularly in capital city areas, Ms Flaherty said.

“Over May - which is our last full month of data - we saw prices up 0.4% in capital cities, and compared to 12 months ago, prices are sitting 7.2% higher in capital cities and 5.3% higher in regional areas,” she said.

“The fact that we're continuing to see property prices climb with interest rates sitting so high is a symptom of the undersupply of housing.

“Even though we're seeing relatively high levels of homes coming up for sale, that buyer demand is very strong, and so that's what's driving those prices higher.”

The trio of cities outperforming

Across the capital cities, Perth has led the charge with homes selling 25% faster and prices increasing 21% year-on-year to a median house price of $699,000, according to PropTrack.

Unlike the larger capital cities of Sydney and Melbourne, where the total volume of property listings are 18% and 25% higher than a year ago respectively, Perth remains incredibly tight.

PropTrack data shows total listings in Perth in May were 23% lower than the same time a year ago.

The weather may be cooling but Perth's property market remains hot. Picture: Getty

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Belle Property head of WA Travis Coleman said Perth has bucked the traditional trend of a slower winter market, with low stock levels being met with high demand and buyer activity.

“Evidence last weekend, we opened up a property, launched it on a Friday and had 126 groups through and received 12 offers and sold it on Tuesday,” he said.

Mr Coleman said it was unlikely that conditions will ease through winter, advising would-be buyers to continue to monitor the market, attend home opens and talk to agents about potential listings.

“Traditionally, an agent might be holding back listings for the spring rush,” he said.

“I don't believe we're doing that anymore - we're trying to get properties to market quicker given the fact that there's such low volume levels.”

Property in Adelaide and Brisbane also remains hot, with both capital cities recording strong monthly price growth. Adelaide home prices have grown 14.5% over the past year, followed by Brisbane at 13.7% according to the latest PropTrack Home Price Index.

A two-speed market is emerging, with Adelaide, Perth and Brisbane outperforming the other capital cities. Picture: Getty

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Brisbane agent Adam Stefan of LJ Hooker Stafford said the city's winter property market was off to a stronger start this year compared to last year, with most market segments outperforming expectations.

However, he said many people looking to sell were remaining cautious due to low stock.

“They're actually holding off from selling, which is obviously helping to add to the lack of supply on the market at the moment with buyers out there every weekend,” he said.

“I'm seeing a lot of people that are looking for six to eight months because of the lack of supply.

“I do think when we hit July, the new financial year, there will be a bit more stock come on and I think that'll get snapped up pretty quickly with the amount of buyers out there.”

Where conditions have cooled

While Perth, Adelaide and Brisbane property markets have emerged as outperformers, Ms Flaherty said sluggish conditions were being seen in other markets.

“Hobart saw really, really strong demand during the pandemic years and since that time, we've really seen property prices correct across Hobart. They've actually fallen over the past 12 months – they’re down 2%,” she said.

“Another one is regional Victoria - it hasn't had any growth over the past year and property prices are down 1%.”

In Sydney and Melbourne, more homes are being listed for sale than what was typical for winter, Ms Flaherty said.

“Melbourne has been one of the weaker performing capital cities, prices are up just 0.9% over the past 12 months,” she said.

“So essentially, prices have held pretty steady in Melbourne.”

McGrath Croydon principal Paul Fenech said interest rate uncertainty has probably had more impact on the market than winter, with activity only slightly slower compared to a year ago.

“If the price range is right, buyers will buy,” he said.

“Probably there will be some buyers who aren’t negotiating as much because they’re saying, ‘Hey rates have gone up, we would have probably paid it last year when rates were a bit cheaper,’ but now they’re holding off, so ( there’s) not as many deals coming together as quickly.”

Sydney agent Ric Serrao from Raine & Horne Double Bay and Bondi Beach said the onset of winter has slowed the market, but transactions were still occurring at a smaller volume.

“There doesn't seem to be, right at the moment, any FOMO in the market, or any urgency,” he said.

“But in saying that, winter comes over, spring hits, and all of a sudden it's like the bees, they start making honey."

The conditions have been described as a “normal” market – something Sydney has lacked in recent years due to the rollercoaster ride of price climbs and falls.

“[Winter] is the time of year that probably 50% to 60% of the real estate population of the eastern suburbs goes away. So I think a lot of agents will now be listing for July-August and they will push those campaigns out – that’s pretty standard.”