Spring is traditionally the busiest time of year in property. More sellers list when gardens look their best, and plenty of families want to be settled before Christmas and the new school year.
In the four weeks to 30 August, total listings across the capitals were 24% higher than a year earlier and 8% above the five-year average, while new listings came in 6% lower than a year ago. Figures are indicative only.
This year's spring season is shaping up to look quite different from the ones buyers have become used to. Here's what's actually changed, and what it means if you're planning to buy.
The Market Has Already Softened
Spring arrives this year against a backdrop of falling values. Properties are taking longer to sell and national home values have now dropped for several consecutive months, which we covered in this month's market update.
Serviceability constraints, higher mortgage rates, reduced borrowing capacity and cost-of-living pressure are all weighing on buyer sentiment, and economists are widely expecting the Reserve Bank to lift the cash rate again in September or November. That's made a lot of buyers cautious. It has also, quietly, made the market easier to negotiate in.
Plenty Of Stock, But Fewer New Listings
As demand softened over winter, homes took longer to sell and the pool of available properties kept building. Advertised stock across most capitals is now sitting well above both last year's levels and the five-year average.
What's interesting is that the flow of new listings has gone the other way. Newly advertised homes were 6% below a year ago and 8% under the five-year average towards the end of winter. Experts expect the usual spring surge to be more subdued this year, with some vendors choosing to wait for conditions to improve rather than sell into a soft market. So the choice on offer is real, it's just mostly stock that has already been sitting there.
Investors Are Sitting On Their Hands
After a run of cash rate increases and the Federal Government's changes to negative gearing and capital gains tax, a lot of investors are reassessing their plans. Australian Bureau of Statistics data shows the total value of new home loans fell 5.4% in the June quarter, driven largely by an 8.6% decline in investor lending. We looked at the detail in what the reforms are doing to investor behaviour.
For owner-occupiers, that thinning of investor activity matters more than it sounds. In the price brackets where investors and first home buyers overlap, there's simply less competition at the moment.
What This Means If You Are Buying
More properties, less competition and longer selling times add up to something buyers have not had much of recently, which is time. Time to compare options properly, attend a second inspection, and negotiate on price and on contract terms rather than waving conditions through to win a race.
Affordability is still the hard part, and nothing about a softer market changes that. But the buyers who understand their position and are ready to move when the right property appears are the ones who tend to benefit when conditions shift.
Preparation Is The Whole Advantage
Knowing your borrowing capacity is the first piece, and it may have moved since you last checked, which we explained in what actually shifts the amount a lender will write. From there, conditional pre-approval is what turns a budget into something you can act on. If this is your first purchase, our guide to how a broker fits into a first purchase is worth a read alongside it.
