This year’s spring-selling season is not expected to be as jam-packed and busy as it usually is, but investors still need to watch out for five possible trends that could unfold to take advantage of the unique market conditions, according to CoreLogic.
1. New listings and auctions will still rise
The season commenced off the back of a slump in property listings in August, a month which typically records growth.
The number of available residential properties for sale across the country fell 3.5%, driven by the fewer properties that came into the market over the past month.
However, CoreLogic’s head of research Eliza Owen said there are data points that indicate that a growth in new listings is on its way in the coming weeks.
“The lift in listings is also expected to flow through to the auction market, where the number of properties going under the hammer across the combined capital cities typically lifts from September, and continues rising through to the start of December,” she said.
2. New listings growth will vary between regions
Over the five years before the pandemic, new listings increased 19.6% between winter and spring.
However, the highest gains in new listings were usually in the cities with cooler climates like Canberra, Adelaide, and Hobart.
“Between 2015 and 2019, the volume of new listings added to the market has on average doubled across Adelaide Hills in this period,” Ms Owen said.
“In addition, many regional, lifestyle areas like the Mornington Peninsula, Yass Valley, Surf Coast and Huon Valley see a notable uplift in new listings through spring.”
3. Bumper spring-selling season is unlikely
The markets are unlikely to replicate the bumper spring-selling conditions from last year.
Approximately 154,294 new listings were added to the market through spring last year, which is higher than the previous decade average of 144,985.
Meanwhile, auction volumes surged, reaching a new record over the week ending 12 December when 4,981 homes went under the hammer.
These surges were due to the extended lockdowns across some parts of Australia over the first half of 2021, resulting in sellers playing catch-up to meet the pent-up demand post lockdowns.
“Market conditions are very different — buyer appetite is falling against higher interest rates, properties are taking longer to sell, and vendors are having to offer greater price discounts in order to get deals done,” Ms Owen said.
4. Long-term owner-occupiers are more likely to sell
During a decline, the average hold periods of sold properties increase.
Ms Owen said the twelve-month hold periods have been elevated amid the current downturn, as well as during the downturn from 2017-2019.
“This is because recent buyers are at more risk of making a nominal loss if they sell during a downturn while those who have held their property for longer are more likely to have made nominal gains, even if the market is going through a short-term, cyclical downswing,” she said.
5. Flexibility on price is a must
Spring-selling seasons are not always a seller’s market, and this is particularly true this year.
Properties are already taking longer to sell, with the median days-on-market hitting 33 over the three months in August from a low of 20 days in November 2021.
On top of this, median vendor discounting was at 4% across Australia, higher than in the past three years.
Ms Owen said this shows that sellers must open their ears to buyer feedback and be flexible on their price expectations.
“Serious vendors will need to be realistic about their price expectations and ensure they have a quality marketing campaign behind the property in what is likely to be a more competitive selling environment through spring and early summer,” she said.
“This reduction in price is largely a function of rising mortgage rates, where buyers may not be able to afford as much debt as they could a few months ago.”
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