- Sydney and Melbourne saw days on market increase to almost two months
- House prices have dropped some 10% nationally
- Stock is sitting at around 230,000
Houses are taking longer to sell across many Australian cities, with the property market beginning to favour the buyer.
Sellers still expecting to get away with pandemic-high prices should not be surprised when the crickets chirp at auction.
Borrowing and buying power is decreasing month by month, with experts correlating that with the rising interest rates; many are being priced into different markets, or out altogether.
Houses take longer to sell
Houses across the big capitals of Melbourne and Sydney, along with Canberra and Hobart are all staying on the market much longer than they were a year ago, according to Domain data.
This indicated there is less buyer competition, providing opportunities for prospective property owners to take their time when making one of the biggest financials decisions of their lives.
On the other hand, houses in state capitals that have proven hot across the pandemic continue to see days on market drop.
|
HOUSES |
||||||||
| Canberra | Adelaide | Brisbane | Darwin | Hobart | Melbourne | Perth | Sydney | |
| Oct-19 | 84 | 111 | 93 | 168 | 45 | 79 | 142 | 83 |
| Oct-20 | 71 | 118 | 104 | 214 | 52 | 93 | 131 | 71 |
| Oct-21 | 33 | 76 | 53 | 119 | 18 | 49 | 69 | 36 |
| Oct-22 | 51 | 63 | 49 | 106 | 50 | 56 | 55 | 54 |
|
UNITS |
||||||||
| Canberra | Adelaide | Brisbane | Darwin | Hobart | Melbourne | Perth | Sydney | |
| Oct-19 | 105 | 152 | 137 | 273 | 55 | 94 | 151 | 97 |
| Oct-20 | 114 | 164 | 138 | 372 | 55 | 98 | 147 | 78 |
| Oct-21 | 69 | 107 | 87 | 188 | 32 | 82 | 79 | 66 |
| Oct-22 | 49 | 74 | 55 | 125 | 44 | 86 | 90 | 72 |
Source – Domain
The Property Tribune’s full report on the data and best suburbs and areas for buyers in Australia can be found here.
Domain’s Chief of Research and Economics, Dr Nicola Powell said: “Days on market is a good indication of the balance between supply and demand of property.
“While the days on market have gone up compared to this time last year we need to remember that there was extraordinary demand last year, creating high levels of competition and pushing down days on market.
“While increasing interest rates and inflation have tempered demand, the current days on market are still lower than the previous five-year average for this time of year (apart from houses in Hobart). Many sellers can expect a sale provided they are meeting market price expectations.”
Nicola Powell, Domain
House prices drop
According to SQM Research, the total number of property listings across the country saw a brief dip around the end of 2021, with listings now increasing again. The latest SQM data shows over 230,000 listings around Australia.
Australia
Australian house prices have also continued to rise, albeit dipping briefly during the third quarter of this year. The average house price in Australia peaked at around $815,000 in June 2022, before dropping to a July low of around $800,000. Prices have again risen, with the latest data showing an average Australian home costing some $830,000.
Australia
CoreLogic data has also revealed that house prices have declined by over 10% nationally since peaking earlier in the year.
Why are house prices dropping?
One expert, Lloyd Edge, said the list of reasons includes inflation, cost of living pressures, and constant interest rate hikes.
“With the Reserve Bank of Australia trying to curb the pressures of rising inflation, the interest rate hikes have resulted in a slowdown in property markets growth,” said Mr Edge.
“This flow on effect of interest rate rises to the property market is a direct correlation with property buyers borrowing capacity. When the interest rates rise, the banks are willing to lend less to ensure that borrowers are able to pay back their loans.
“With a lower borrowing capacity, some buyers are not able to afford the same properties they could 12 months ago as well as some buyers being priced out of the market altogether if their pre-approved amount is too low to purchase, particularly if they are looking to buy in one of the capital cities.”
Will the housing market crash?
Cost of living, dwindling demand, and dropping house prices, among other factors, are growing the contingent of “wait and see” buyers.
With the heady promise of a housing market crash and dirt-cheap houses after seeing homes sold for such mind-bending prices, it comes as no surprise many are tempted to wait it out.
“If you are choosing to sit and wait for the bottom of the market to happen before you buy your next property, then we have news for you.”
Lloyd Edge, Aus Property Professionals
“Realistically, no one will know when the bottom of the market will be and this is because you don’t know you’ve reached the bottom of the market until the market starts rising again and by that time you will be too late,” said Mr Edge.
“Another thing to consider, sellers may start to hold off as they wait for the property market to start rising before they will sell their property.
“When this happens, there will be fewer choices on the market for buyers, and supply will be restricted, which makes property prices increase. So, if you are wanting to hold off for a better deal there is a risk that you may miss out altogether.”
