The announcement of the first in an expected series of interest rate hikes has come sooner than predicted, leaving many to wonder what lies ahead for the property market.
After two years of rising property prices to record heights, price growth has begun to slow and in some markets even reverse, bringing us to a ‘post-peak’ Australian property market. With buyers now met with a potential future of reduced borrowing power and rising inflation resulting in a higher cost of living, conditions have begun to ease off from favouring sellers to become more normalised.
In this update, we cover the current state of the Australian property market and how this impacts property owners, and how home sellers can continue to achieve top results in a ‘post-peak’ reality.
What’s happening with property prices across Australia?
In the latest CoreLogic report, it is evident that different markets are taking place across Australia right now.
Sydney home prices have continued their dip in April, falling another -0.2% this month while prices continue to flatline in Melbourne.
A different story unfolds in Brisbane and Adelaide markets, with prices continuing to rise +1.7% and +1.9% respectively, although the growth has also eased compared to the rates we saw earlier this year.
A similar situation is seen in our regional markets, with growth trending in a downward direction from +1.7% in March, to a smaller +1.4% in April.
Nationally, home price growth rose +0.6%, the lowest monthly increase since October 2020 - with prices still sitting +19.8% year on year.
The incredible rises in property prices we have witnessed the last two years has been driven in most part by the shortage of listings available.
Is it still a seller’s market?
The rate of new listings has dipped on a national level, but again we see a big variance between the markets across Australia, attributing to the difference in directions for price growth.
In ‘strong’ markets such as Brisbane and Adelaide, total available listings are sitting around -20% lower year on year (-40% the five year average).
Meanwhile, Sydney, Melbourne and Canberra have begun the transition to a normalised market, with +6.9%, +3.7% and +6.9% respective total available listings year on year.
Higher inventory levels results in less buyer competition, with buyers finding themselves with more choice, easing overall demand and as a result, normalising the market.
##The state of regional markets For the present time, the regional markets have been relatively insulated from the downtrend activity we have seen across some of the capital cities. House prices still remain +23.9% year on year, with advertised stock levels sitting at -42% below the five year average.
Home sellers in regional markets may continue to reap the benefits of better affordability and the ongoing mindset that regional areas present better opportunities for lifestyle and housing options for city-dwellers (who may find their purchasing power reduced amidst higher costs of living).
##The impact of interest rate hikes Interest rates are currently the hottest topic in the media and it can be hard to escape the conversation.
With the first interest rate hike since November 2010, and the high likelihood of many more to come, it is yet unknown the exact severity it will have on the property market. One thing that many experts can agree on is that it will have a cooling effect on home prices in the near future, particularly as buyer borrowing power begins to reduce.
It is also important to note however, that since the onset of the pandemic, national housing values have increased by +26.2%. Recent RBA messaging has suggested a +2% increase in the cash rate could bring property prices falling by as much as -15%, which would ultimately bring home values back to levels seen in 2021 - which helps to put things into perspective.
As the market begins to shift and a more defined change is likely to come later in the year, those considering selling are advised to make a move sooner rather than later to take advantage of the current more favourable conditions than wait for a murkier latter half of 2022.
Top tips for selling in a ‘post-peak’ market
Today’s market still brings strong selling conditions and prime results, and those looking to take advantage should arm themselves with the best knowledge of how to get the best price in the current conditions.
Set the right price, and the right expectations
- Buyers are beginning to become more selective about the properties they inspect and make offers on
- More interest in property prices and price guides, so if your property is not priced accordingly to what the market value is, you may be disappointed
- Take on board agents feedback which should be in line with what buyers are telling them
- Try to take emotion out of the sale and property price
- Correctly set price guides will still achieve stellar results for sellers
- Choosing the right agent with expert local knowledge and experienced strategy is absolutely critical at this time
Colder months present a golden opportunity
- Spring and Summer are touted as the best time of year to sell, but with that comes more competition and oversupply
- Get on the market before the wave of listings and capitalise on the lower overall levels of stock
- The later half of 2022 is still unknown with a market correction on its way, but the golden window of opportunity is obvious now while conditions still favour sellers for a little while longer
Make your home warm and cosy for selling
- A warm house can be very welcoming when the weather’s at its chilliest so keeping the heater on a comfortable temperature is a good start
- Check that your heating system is working perfectly and efficiently as this can be a point of consideration for buyers as they won’t have to spend time and money to have it overhauled
- Clear the yard of fallen branches, leaves, weeds, and other debris that make it look neglected.
- Read our top tips to sell in the colder months
Work with a reliable and experienced real estate agents
- If you want to sell your house during the colder months, an expert agent can lead you on the right path.
- A local and experienced agent can help you with understanding the local market and what value your home could be worth in this current climate.
- At a time of economic uncertainty, selling with a fixed-fee can help you know exactly what the cost of selling your home will be. Plus, you can pocket the profits from your sale. Find out more about our service here.
Talk to your local Upside agent to see how your local suburb market has been performing, and what your home could be worth right now .