Wait for spring and you might get sprung

Aug 2023Karen Millers

New listings are expected to increase, but the chance of a price correction is slim

Home seekers who wait for spring bargains will likely end up empty-handed, and may struggle to get into the market later on, housing experts warn.

It comes as agents brace for a bump in property listings as the weather warms up, with the greater choice of available homes set to ease buyer competition for properties.

The increase will be especially welcome news for those who have grappled with the record-low supply of new listings seen in most areas over winter, which helped boost prices.

And while this climate is set to change over spring, a panel of Property Investment Professionals of Australia members say the chance of a market correction that will push down prices is slim.

PIPA chair Nicola McDougall said rapid migration, especially into Sydney and Melbourne, was mitigating some of the impact of higher interest rates and rising listing volumes.

“Part of the reason why prices have been strengthening is the significant number of overseas migrants,” Ms McDougall said.

“(It’s) causing rental markets to continue to struggle with a critical undersupply of stock.” She said it also appeared that the rising interest rate cycle may have come to an end, providing some confidence to property buyers around the nation.

Ray White chief economist Nerida Conisbee said homeseekers’ fortunes would depend on the types of properties they targeted. Turn-key properties – those that have been renovated or are in excellent nick – will be hotly contested.

Those needing improvements or in poor locations such as busy roads would likely struggle to sell as most of the current buyers are not interested in those properties, Ms Conisbee said.

Property buyers will also face stiffer competition at the more affordable end of the market, because interest rate hikes had slashed buyers’ budgets.

Ms Conisbee said there could be properties sold for prices well below their 2022 peak but most would be at the top end of the market.

Victor Kumar, the director of Right Property Group, said spring would be a critical test for the market.

“Selling agents that were expecting a whole raft of properties to hit the market, as they report fielding increasing calls for market appraisals, are still to bring those properties on to the market,” he said.

“Owners struggle to rationalise selling their properties, as they cannot qualify for a new loan at the same or higher level under the current lending constraints, and renting is also a struggle, with a shortage in most areas.

“Construction starts are still, year on year, quite low, which will serve as a great buffer to the potentially softening prices.” PropTrack economist Angus Moore recently revealed that new listings in Brisbane fell 2.9 per cent in July, and were down 14 per cent compared to the same time last year.

New listings in regional Queensland also dipped 11 per cent compared to June.

Originally Published: Courier Mail, Brisbane | Page 5 | 26 August 2023

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