It’s the first week of Spring and the beginning of what is traditionally the busiest season in property.
It is clear that confidence is returning to the market across Australia, with several positive elements -all national in nature, having an impact on every capital city and regional area.
First came the election result, which meant no changes to negative gearing or capital gains tax for investors; then two interest rate cuts; and an easing in lending that has allowed some borrowers to access tens or even hundreds of thousands of dollars in extra finance compared to last year.
This has led to the first green shoots of recovery on the East Coast.
In June, Sydney and Melbourne recorded home value increases for the first time since their respective market peaks in 2017.
In July, five of the eight capital cities all had a subtle rise in values, according to CoreLogic data. This included an 0.2% increase in Brisbane home values – the first increase since November 2018.
In mid-August, the combined capital cities recorded a final auction clearance rate above 70% for the first time since May 2017, albeit on significantly lower volumes of stock. And the latest Westpac-Melbourne Institute ‘time to buy a dwelling’ index is at its highest level since early 2014.
This new momentum points to a buoyant Spring season ahead, however listing volumes are down by up to 30% - a decade low, so we anticipate fewer Spring sales but continually rising auction clearance rates in the major cities and particularly in the most desirable suburban pockets.
As we start to see consistently stronger prices being achieved, more sellers will be inspired to put their homes on the market, indicating a potentially later Spring/Summer selling season this year.
Due to the stock shortage, buyers are proactively calling agents to see what new listings they have coming up so they can try and get a jump on the best properties for sale. They can see the bottom has passed and want to buy now before prices start rising again.
Besides calling agents, the best way to get first option on new listings is to register your contact details and buying criteria with as many individual agencies and agents as possible.
This is important because many agents like to conduct ‘preview inspections’ for their database clients. In this case, you will at least get first email notification of each new listing – and maybe even the opportunity to inspect it before the public marketing begins.
This will give you about half a week’s head start on other buyers. You can make an offer to try and take it off the market or you can just use this extra time to consider the home.
Agents do previews for a couple of reasons. They get valuable price feedback from genuine buyers before public marketing begins; and they can potentially attract strong pre-campaign offers.
It is not uncommon for sellers to take a good pre-campaign offer as there are many benefits for them, including avoiding advertising costs and being able to make their next purchase sooner.
Of course, you should still register on the big portals of realestate.com.au and domain.com.au to cover all bases, as not all agencies conduct preview inspections.
Here are some potential Spring trends…
- There is already anecdotal evidence of more buying activity amongst ex-pats, especially from Hong Kong and the UK.
- Following recent volatility on the sharemarket and falling interest rates making deposit earnings very weak, will investors return to property for stability and reliability now that the bottom has passed?
- McCrindle Research says seachanging is getting younger, with more working age people leaving Sydney, in particular, for coastal and treechange locations. With city stock so low, sellers can leverage this to get a great sale price and buy in a much cheaper regional area this Spring
Easier access to finance and historically low interest rates will power demand this Spring. There’s speculation of one or two more official cash rate cuts over the next year, so it’s a great time to borrow if your employment is secure and you have some cash buffers in place.