Disturbing global events were cited in the Reserve Bank of Australia’s decision to keep rates on hold last week and the floods add further uncertainty to the (property market) outlook.
The catastrophic toll of the floods will necessarily impact the residential market in many ways, some unforeseen, and this will be felt for many months, even years.
The rental market in particular can be expected to come under even more stress. A large-scale clean-up will need to occur and many damaged homes will be in need of repair.
But rental vacancy is already extremely tight and, as more people seek rental accommodation while this work is carried out, the options for those whose homes have been impacted are slim.
Landlords, often on the receiving end of housing policy decisions, play an enormously important role in providing rental accommodation. Policies which discourage people from investing in property need re-thinking, because the rental crisis is set to worsen.
These events are unfolding at a time when house price growth appears to have flattened.
Demand however remains strong. Nationally, auction volumes over the weekend were nearly double that of the corresponding week last year, and yet the clearance rate comparison shows only a mild decrease.
There is a temptation among commentators to equate a normalisation as something more sinister. Yet, as agents are experiencing on the ground, the stability in prices is a consequence of the levelling of the power balance between buyers and vendors.
Buyers recognise this and are enjoying their moment. Buyers agents are doing what they can to encourage vendors to sharpen their pencils. This is the type of market where sales agents really earn their fees.
It’s also a time when the value of our investment in our homes is magnified, as many people across the state grapple with devastating loss.