Australian Property Market Heads Into Spring With Buyer Demand Still Selective
Australia’s property market is heading into spring with auction activity beginning to pick up, but the latest numbers suggest buyers are still being selective.
Across the combined capital cities, 1,482 homes went to auction, up 6.6% from the previous week, while the preliminary clearance rate eased to 52.4%. Sydney remained one of the stronger major auction markets at 56.3%, while Melbourne recorded the highest auction volume with 653 auctions and a 54.9% clearance rate. Brisbane was noticeably softer at 31.5%.
Home-value momentum remains softer across the major capitals, with the combined capitals recording a 1.1% decline over the latest 28-day period. However, the longer-term picture remains quite different between markets, with Brisbane, Adelaide and Perth still showing positive year-to-date growth while Sydney and Melbourne remain below their starting point for the year.
Rental conditions continue to provide a different story. The national median rent is now $708 per week, up 5.9% over the past year, while increased total listings are giving buyers more choice. Overall, the market appears to be entering spring with more activity, but not necessarily more urgency from buyers. and investor mortgages staying supressed.
What This Means For;
First home buyers:
More properties remaining on the market can mean more choice and potentially greater negotiating room. Softer short-term price movements may also provide some breathing space, although competition can still vary considerably between cities and suburbs. This can certainly help first home buyers with their home loans and required deposit/borrowing amounts.
Investors:
Rental growth remains one of the stronger parts of the market, with the national median rent up 5.9% over the year. Softer property values may improve opportunities in some markets, but the individual property’s cash flow, borrowing costs and purchase price remain critical.
Up-sizers:
Increased listings can provide more choice when looking for the next home, while softer recent price momentum may make the transition easier in some markets. The key is managing the timing and finance of selling and buying.
What We’ll Be Watching Next Week
As we move further into spring, there are a few things we’ll be keeping an eye on:
Auction activity
Will the seasonal increase in auction numbers continue, and will stronger activity translate into higher clearance rates?
Buyer demand
Are buyers becoming more confident, or are they continuing to take their time and negotiate as more properties come onto the market?
Differences between markets
Sydney and Melbourne are currently showing a different pattern to Brisbane, Adelaide and Perth. We’ll be watching to see whether those gaps widen or begin to narrow.
Rental conditions
With rents continuing to rise nationally, we’ll be watching whether rental growth remains strong and how this continues to affect investors and housing affordability.
Next week we’ll see whether the spring market starts to show a little more momentum, or whether buyers remain firmly in the driver’s seat…..
