Lower supply and improved lending conditions to drive buyer and seller activity
A reduced supply of homes for sale and increased borrowing capacity are expected to create a highly competitive spring property market, according to real estate group LJ Hooker.
Its analysis indicates that new property listings are currently 18.2% below the national 10-year average. This, together with a 65-basis point reduction in interest rates, is intensifying competition across the country.
The most significant drops in available listings have been seen in Brisbane (down 23.2%), Hobart (down 31.9%), and Darwin (down 24.7%). Sydney and Melbourne, the largest capital city markets, have also recorded declines of 11.4% and 8.6%, respectively.
Mathew Tiller (pictured right), head of research and business intelligence at LJ Hooker, said the imbalance between supply and demand, as revealed in LJ Hooker’s Australian Listings Report, is favouring sellers.
Auction clearance rates in Sydney and Melbourne have surpassed 70% in August, and are expected to remain robust in the early weeks of spring.
Tiller noted that the spring period presents a particular opportunity for sellers, as buyers benefit from improved borrowing conditions.
“The shortage of listing suggests sellers are holding out for more rate cuts, looking to cash in on further borrowing capacity among buyers,” Tiller said. “But the Reserve Bank of Australia (RBA)’s monetary board has shown caution in their decision making, making it hard to predict when more cuts will be made.
“Sellers who are holding off until the RBA makes its next move may become lost in the crowd, competing against more sellers in their neighbourhood.”
Additional competition is expected following the federal government’s decision to bring forward changes to the First Home Buyer Guarantee. From Oct. 1, the scheme will include higher property price limits and the removal of income caps, three months earlier than previously scheduled.
“First-time buyers who previously sat on the sidelines now have greater access to the market,” Tiller said. “When you combine this with fewer listings and cheaper finance than a year ago, sellers who act early in spring will be best positioned to take advantage of heightened competition.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
