Residential Property Market - Where is it Heading?
Here’s an extract from an industry article I received 15th August from the Real Estate Agency group (REA):-
REA Group’s Property Track Listings Report for July 2022 has found that while the total supply of properties available for sale lifted by just 0.6 per cent in July, listings increased by the largest amount for 12 years when compared to the same period last year. Indeed, the property data specialists found that the total supply of properties listed for sale increased by 4.9 per cent, which is the largest year-on-year increase since 2010. This can partly be attributed to the fact that Sydney and Melbourne – the two busiest property markets – were in COVID-19 lockdowns for most of July 2021, which would have lowered the number of new listings at that time. For example, national new listings were 6.5 per cent higher in July 2022 when compared to July 2021, while Sydney’s new listings were 18.2 per cent higher than in July 2021. As such, the increase in overall supply has largely being accounted for by the fact that properties were taking longer to sell. Property Track economist and the report’s author, Angus Moore, characterised this year’s growth as an “unusually busy winter period”. He noted that ‘’it’s one of a number of small ways that the market is shifting in favour of buyers. The wave of new supply coming to market over the first half of the year, particularly in Sydney, Melbourne, and Canberra, has lifted the stock available on market and helped make conditions a bit less competitive,” Mr Moore commented. ‘’Selling conditions have begun to temper from their very strong levels earlier in the year. Measures of buyer demand have declined off their high levels, it is taking longer to sell homes, and auction clearance rates have fallen.’’ While noting that rising interest rates were working against those looking to participate in the market, he said ‘’the industry should expect buyer numbers to remain somewhat steady’’ .
Now in reading the above you might naturally then assume that rising interest rates would help to accelerate this adjustment between property supply and demand, as borrowers were more hesitant to enter into purchasing. That will certainly play out over the coming 12 months.
However, there are two key factors that may keep property prices more stable:-
The Federal Governments’ ramping up of skilled immigrants (some figures touted at 200000 per year going forward)
Low unemployment, with wages growth expected to pick up over the coming year.
I know the above is still very ‘metrocentric’ talking about capital cities, but this still effects regional areas. If city prices hold steadier than first expected then sea & tree change will likely still occur in steady numbers. We will watch this ‘push-me-pull-you-‘ situation play out. Suffice to say it’s business as usual in terms of property purchasing and if debt is involved, you can contact me at anytime to discuss your personal unique scenario.
If you have any question give Michael of COMPASS lending and finance a call on 02 6583 2211