Home Insights The playing field evens – are we moving into a buyers’ market?

The playing field evens – are we moving into a buyers’ market?

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Last year, strong demand, low supply and low interest rates combined to raise prices at the fastest pace in over 30 years.

Property purchase demand far exceeded the supply of properties for sale, but changed as the spring sales season began, and the number of properties on the market increased rapidly.

So are we moving from the seller’s market to the buyer’s market?

The housing market is slowing, prices are beginning to fall in some parts of the country, and for the first time since the May pandemic, home prices across the country have fallen.

Potential buyers may be facing a deterioration in affordable mortgage prices, but new listings remain strong. This is looking at the balance of the power shift.

Buyers have even more options, especially in Sydney and Melbourne, as the total number of properties available for sale is above the 10-year average and prices are declining.

Sellers were overwhelmingly dominant last year, but this has changed as the housing market slows. Buyers now have a bargaining advantage and vendors need to dominate price expectations.

Properties stay in the market longer, buyers have more choices and less pressure to move quickly. The fear of overlooking has eased.

As the number of properties listed since last spring increased, the total inventory of properties for sale increased. The situation for buyers in Sydney and Melbourne has improved in particular, with more options than in the last two years.

However, mortgage rates are rising and many are no longer able to borrow the same amount as this time last year. Also, as interest rates are expected to continue to rise, potential buyers will not only have higher borrowing costs, but will also have greater uncertainty about future borrowing costs than in the last two years.

This is reflected in the slowdown in the market and the restraint of price momentum.

This is especially the case in Sydney and Melbourne, where the share of sales that are below list price and closed are rising.

However, in Adelaide and Brisbane, things are a little different, with total inventories of properties available for sale below pre-pandemic levels and below the 10-year average. However, things have improved a bit in the last few months.

This is one of the reasons why prices have not yet reversed in these cities, despite the declines in Sydney and Melbourne. Competition is fierce, buyers have few choices, and vendors do not yet need to dominate price expectations. This is also one of the reasons why auction clearance rates have been maintained stronger than ever with these small capitals.

This divergent situation is also seen in sales volumes that have been slowing so far in Sydney, Hobart and Melbourne compared to the same period last year.

Therefore, while Sydney and Melbourne appear to be rapidly approaching the buyer’s market area when it comes to the changing dynamics that underpin the housing market, sellers still dominate in the small capital.

Larger and more affordable markets are slowing more rapidly as the pandemic-induced homogeneity of the real estate boom subsides.

So far, housing prices have continued to rise in smaller capitals and activity has continued to rise, This Month’s Housing Market Index Report It has shown that activity is beginning to slow in line with larger markets such as Sydney and Melbourne. This applies not only to Brisbane in particular, but to some extent to Adelaide.

Even the strong growth seen so far this year in Brisbane and Adelaide could ease later this year, with affordable mortgages focusing on demand and as official cash rates rise. Borrowing capacity is limited. That means that those markets will also level out the competition.

The market is currently slowing down, Australian Bureau of Statistics We estimate that Australia’s total housing stock has exceeded $ 10 trillion for the first time. Data reached a record $ 10.2 trillion, showing an increase of $ 221.2 billion in the March quarter. That said, the pace at which home prices have skyrocketed since the outbreak of the pandemic has slowed significantly since last year.

That figure is a significant increase of $ 1.8 trillion from the March 2021 quarter, when Australia’s total housing stock was $ 8.4 trillion.

This is evidence of the exceptional environment that characterizes the pandemic property boom-it simply couldn’t continue.

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