Property market observers are mentioning an apparent shortage of property listings through the spring selling season this year.
Reserve Bank of Australia governor, Philip Lowe, has said that inflation is likely to remain low until the economy is such that it generates enough jobs to stimulate strong growth in wages. Until we get past the end of the mining boom and the economy gradually strengthens, a couple more interest rate cuts may be on the cards.
Interest rate cuts alone won’t make people want to sell, especially if there is little on the market to buy, and many home-owners may be waiting to feel more secure about employment and future wage rises before upgrading in the current market. Sellers now in the market have the opportunity to benefit from motivated buyers faced with a narrower choice of quality properties.
The RBA governor also made the suggestion that Sydney prices might rise.
On top of that, CoreLogic’s September report on the national property market makes a number of observations including that home values are higher over the past year in all cities except for Perth and Darwin, and that across the combined capital cities, there were 27,337 unique new listings, 2.6% lower than a year ago, while total listings are 3.4% higher. Overall, the prediction was for continued strength in the housing market.
It is also worth remembering that history tells us when people start sensing their own market beginning to peak, those same people will begin to think about other markets that haven’t yet seen the highs. For example, Sydney and Melbourne property owners may move their focus to the Gold Coast, and move themselves!
The real point is that there is no one property market that every buyer and seller currently sits in.
There are property markets all across Australia – capital city to capital city, in city suburbs, in country towns and in coastal locations, for example – all performing differently. Not only is each state at its own stage of its property cycle, but within each state different segments of the markets are behaving differently, and this extends beyond location to aspects like different property types.
So what should make sense to a buyer or seller is to look to the performance of the market they are buying and selling in, and seek out the experts in that market.
Michael Davoren is the CEO of RE/MAX Australia New Zealand.