You don’t have to be a buyer to notice that listings have risen. Gone are the days when buyers had to make a snap decision after a 5-minute inspection.
But there are markets within markets.
That’s why in this newsletter, we’ll look at the top suburbs where listings have skyrocketed and discuss some of the implications if you’re looking to buy.
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Housing values may have fallen, but they’re still significantly higher than what they were before COVID.
Capital city prices are up by 26% since March 2020, according to PropTrack.Prices in regional areas have shot up by 47.4% in the same period.
This year, property prices have been in decline:
- House prices have dropped by -2.3% since January 2022.
- Unit prices have dropped by -2.4% in the same period.
This has partially contributed to a reduced sense of urgency for buyers.
- Buyers are being spoiled for choice and can expect to have the upper hand in negotiations.
Not surprisingly, Sydney and Melbourne have also seen the biggest jump in listings over the year to 31 July 2022.
The most affordable suburb which has also seen listings boom is Karnup in Perth’s south west.
Looking at auctions, there were 1,920 held across the combined capital cities this week. This is up by:
- 5.3% since last week
- 32.14% since this time last year
Preliminary results indicate a 61.7% clearance rate across the combined capitals, down from 73.7% this time last year.
Melbourne had the most properties going to auction last week at 850, up by 9.4% from the previous week.
In Sydney, 702 properties were taken to auction, up by 1.9% from the previous weekAuctions are recording an average of 3.4 confirmed bidders, according to Ray White data. This was between 10 and 12 during the lockdown.
- A drop in the number of bidders gives buyers breathing space to avoid rushing into a purchase, helping them make the right decision.
BEST TIME TO BUY?
In real estate, timing can work in strange ways that may appear counterintuitive.
- The best buying opportunities tend to come up in downturns.
- The worst buying opportunities tend to come up when markets are booming.
Regardless of which phase of the cycle your market is in, look at the yield and growth prospects - this is why many investors are able to secure the best value possible in a downturn.
You may even secure better value by taking advantage of broader market hesitation. Properties that need some work to realise its full potential are often overlooked particularly in cooling market conditions.
Meanwhile, many other buyers may be waiting for ‘good news’ before feeling confident to head back in the market. By this time, it may already be too late to negotiate a good deal.
GOOD VALUE OR A BAD DEAL?
But securing the best value doesn’t mean lowering your expectations.
Don’t forget the fundamentals in your search for a bargain. Don’t compromise quality over price, as it’s quality that will pay you back in spades in the long run.
If you’re finding a property is too easily negotiable, it could mean the vendor is keen to get it off their hands. While this might mean they’re in a desperate situation, chances are the deal may be too good to be true.
BENEFITS OF HOLDING
While residential property values may change every day, one of the pros of property investing is that it’s much less volatile than the share market.
This means what happens to property prices today will have a limited impact on most owners who are holding on for the long term.
Short-term price changes may impact you the most when you’re looking to sell your property.
Prices at a glance
Annual price changes in Sydney and Melbourne have fallen into negative territory for both houses and units.Strength in the Brisbane market has faded, with price declines recorded in both house and unit markets.Darwin is the only capital city that saw house price growth in August.The decline of regional property values is accelerating, with the combined regionals down by -1.5% in August compared with -0.2% in July.