Now that the market has cooled and prices have fallen from their peak, higher lending costs and dampened demand means the time it takes to sell a house has blown out.
According to Domain data, houses are taking longer to sell in every capital city in Australia (except Adelaide) with houses taking up to 29 days longer to sell than during the height of the property boom.
In Sydney, the average house is taking 48 days to sell, notably higher than the 31 days recorded during the December 2021 peak, Domain’s data reveals.
Melbourne’s current 58 days is also much higher than the 38 days recorded in December, while Brisbane’s 41-day timeframe is higher versus its low point of 31 days in June this year.
In the other capital cities, Canberra is now taking 49 days, up from its lowest number of 22 in November; in Perth it’s 54 up from June’s low of 47; in Darwin, the city has the highest number of days on market at 102 compared to June’s 100; and in Hobart, it’s now 46 days, up by the most from 17 in November and December.
Only Adelaide has bucked the trend, with its days on market falling to 59 from July’s 62, June’s 63 and March’s 70.
But houses are still selling faster than pre-COVID
But what is interesting to note is that even though the time to sell a property has increased since the property boom, the sales period is still far shorter than the time it took to sell prior to the COVID-19 pandemic.
Domain’s data below shows that in every city except Hobart, the number of days a house sat on the market was lower in August this year than in May 2020 before the property boom.
In Sydney, the number of days was 48 in August 2022, down from 63 in May 2020.
In Melbourne, that number has dropped to 51, from 56 in May 2020.
In Brisbane, the timeframe is less than half, at 41 days versus 94 in May 2020.
10 fastest-selling suburbs for 2022
When it comes to looking at the data for the suburbs where houses are selling the fastest right now, Queensland dominates nine out of the top 10 spots on the list.
Houses sold the fastest in The Gap and Enoggera in August 2022, at just 20 days - down from 23 days in August last year.
Horses in Sunnybank are also selling in a short 23 days, representing a huge from from the 71 days recorded just 12 months ago.
Bald Hills, Everton Park, Capalaba, Sandgate and Strathpine, all also located in Queensland, all had a sale timeframe of 26 days in August this year.
That’s a decrease across the board from 31 days, 34 days, 36 days and 29 days in August 2021 respectively.
The data shows that the only area outside of Queensland to make the top 10 fastest-selling suburbs was the north-east region of Hobart, where houses are selling in 27 days.
That’s an increase from 18 days compared to the same time last year.
What about units?
It’s not just houses, units in some suburbs are also selling faster than you’d think.
Queensland’s Bald Hills and Everton area also makes the list for units, right at the top in number one spot.
An average unit in this area sold within 21 days in August, a huge drop from the 86 days they took to sell in the same month last year.
In fact, Queensland dominates the top 10 list of fastest-selling suburbs for units as well, taking seven out of the 10 spots.
Carinda in Victoria came in second place, also recorded a 21-day timeframe for unit sales, down from 28 days in August 2021.
Casey-North, the only other Victorian suburb on the list in 10th place, recorded that the average unit sold in 31 days in August this year, versus 59 days in the same month last year.
Elsewhere, Port Stephens in NSW was the only other to make the top 10 - in fourth place with an average 30-day timeframe for its unit sales in August, down significantly from a huge 140 days in August 2021.
The sea- and tree-change trend has seen a surge in demand for QLD property
What is perhaps unsurprising to see in Domain’s data is how dominant Queensland is on the top 10 lists for both houses and units.
After all, the sea- and tree-change shift exacerbated further by the pandemic and Covid-19 lockdowns saw floods of Australians - mainly from Melbourne and Sydney - flock north in search of lifestyle suburbs with more affordable housing options and job opportunities.
This is why Queensland recorded the strongest population growth across the country, at 1.4% in 2021.
In 2020-21 alone, 59,700 people moved on net to Queensland with those net arrivals largely coming from NSW and Victoria.
And all these people were looking for a property to live in.
By comparison, population growth in other states was much weaker - WA (+0.7%); NSW (+0.3%); SA (+0.1%); TAS (+0.0%); ACT (-0.1%); and NT (-0.2%).
The huge shift northwards propped up Queensland’s property market.
In particular, Brisbane was the strongest property market in 2021 exhibiting astonishing growth, with many locations experiencing 30+% house price growth.
Last year property values increased in almost every part of Brisbane - and that’s very unusual.
And as growth slowed across Australia, Brisbane's housing markets continued to perform strongly during the first half of 2022.
And unlike the rest of the country, prices didn’t start to decline until July when Brisbane recorded its first month-on-month drop in property values, of 0.8%.
And the market saw another 1.8% decline in August as the slowdown picked up the pace.
Houses bore the brunt of the price drops with a 2.1% drop over the month, while unit values declined by 0.2%.
The sudden transition into downturn comes after Brisbane housing values surged 42.7% higher through the upswing, adding roughly $234,000 to the median value.
Location, location, location… and investment grade
While the fast sale times in these areas might make for a tempting investment, they don’t necessarily make good investment sense.
But what Domain’s data does show is the importance of location.
You see, they aren’t necessarily the suburbs I would recommend investing in, but these are areas which have enjoyed a boom over the pandemic as many people re-evaluated what they want in a property.
But at Metropole, we always advise on the importance of investment-grade properties and locations, rather than chasing a hotspot or growth area.
But even before looking for the right location, make sure you have a Strategic Property Plan to steer you through the upcoming challenging times our property markets will encounter.
Because aside from remembering that you should focus your efforts on investment-grade properties and locations, you also need to remember that property investing is a process, not an event.
That means that things have to be done in the right order – and selecting the location and the right property in that location comes right at the end of the process.
Fact is, the property you will eventually buy will be the result of a sequence of questions you will need to ask and answer and a series of decisions you’ll need to make before you even start looking at locations.
Long before we talk about a property or the right location with our clients at Metropole, we look at factors including their age, their timeframes, and the desired end results in other words, what do they really want the properties to do – are they looking for cash flow, capital growth, or a combination of both.
And that’s because what makes a great investment property for me, is not likely to be the same as what would suit your investment needs.
So at Metropole, it all starts with helping our clients formulate a Strategic Property Plan.
This will take into account a client’s surplus cash flow position, their risk profile, whether they currently own a home or want to buy a new home or upgrade their existing home in the future, if they are going to increase or decrease their family income, how many other investment properties they own, where they are located and how they are performing plus 35 other considerations.
So whether you’re looking to buy a new home or an investment property and you want more certainty and direction in these interesting times, my recommendation is to sit with an independent property strategist to formulate a plan.
It’s just too difficult to do on your own and I’ve found most investors tend to be too emotionally involved to see their situation objectively.
If you’re a beginner looking for a time-tested property investment strategy or an established investor who’s stuck or maybe you just want an objective second opinion about your situation, please leave your details here and we’ll be in contact and give you more details about how to book a Strategic Property Plan Consultation.
