Australia’s low levels of property listings could be creating a self perpetuating cycle and influencing would-be vendors to sit on their property, according to a property market expert.
PropTrack Director of Economic Research Cameron Kusher said listing levels across the country were low and would-be sellers were potentially put off listing due to the understanding finding a new home could be difficult.
“The time you want a list is when there’s not much competition, demand is increasing and prices are increasing, and that’s where we’re at now,” Mr Kusher said.
“I think for a lot of vendors there’s still uncertainty around whether interest rates are going to go higher.
“The other big one is, where are they going to move to because there’s not much available to buy.
“Yes, they can sell their property, but what do they buy? And, if they end up having to rent for a while, what do they rent? The rental market is so tight.
“I think that’s the challenge for vendors and that’s holding some of them off from bringing their properties to the market.”
Mr Kusher said there were some areas where if vendors were to list, they could be winning the “property lottery”, with some suburbs and towns’ median home price soaring more than 150 per cent over the past five years.
In the North-East Victorian town of Bright, at the foothills of Falls Creek, the median house price has risen 152 per cent, from $775,000 to $1.285 million over the past five years.
Meanwhile in Jindabyne, in the foothills of the Snowy Mountains in NSW, has recorded a 148 per cent jump in its median house price, to $1.55 million, in the same timeframe.
“They’re both similar types of places, very close to the snowfields, and clearly reaping the benefits of people wanting to move away from the cities, particularly during the pandemic,” Mr Kusher said.
“The gap between regional prices and capital city prices had widened so much that they certainly became more attractive areas.”
Mr Kusher said that gap had now closed quite a bit.
“They’re still generally cheaper than capital city places, but the gap is nowhere near as large anymore,” he said.
It’s not just houses that have seen phenomenal growth. Units in some areas have seen gains of as much as $700,000 in the past five years.
The median price of a unit in Noosaville, in Queensland, has risen 108 per cent in the past five years to $935,000, while Jindabyne makes the list again, with a 105 per cent increase in its median unit price to 718,000.
Mr Kusher said buyers in these towns over the past five years had been a mix of owner-occupiers and those looking for a holiday home.
But he said he would be surprised if some of those that moved out of the cities to the country during the pandemic returned to the big smoke.
“I wouldn’t be surprised if we do, especially somewhere like Bright where it’s not an easy commute back to the city,” Mr Kusher said.
“Some people also invested and with interest rates going higher, you might find some people have to dispose of those investment properties if they get into a bit of financial hardship.”