This Week in Real Estate – 29th September 2023
Buying Hunger Games
An insatiable demand means many homes are now being snapped up by cash buyers within hours of hitting the market. A new report from PropTrack shows new listings in Brisbane are down by more than 10%compared with the same time last year. On the Gold Coast, Thomas Fliniks of Harcourts Coastal, sold a waterfront home at Paradise Point, for $1.9 million within 72 hours of it hitting the market. A Sydney buyer purchased it sight unseen before it was taken to auction.
Fliniks says the Gold Coast market is performing exceptionally well, particularly the northern sector. An apartment marketed through Harcourts Coastal at Broadbeach sold within 24hours for a building record of $2.125 million.
PropTrack senior economist Angus Moore expects listings to increase in the coming months, but also says there will still be limited choices for buyers.
He says the total number of properties listed for sale in August is down more than a third compared to before the pandemic.
Quote Of The Week
“Selling conditions and home prices have also improved compared to late 2022. Homeprices nationally have continued to recover, posting their eighth consecutive month of growth in August.”
PropTrack senior economist, Angus Moore
Mortgage Market Calming
The home mortgage market is calming down as experts predict rate rises are coming to an end. Many believe the cash rate has now peaked, with major banks reducing some of their fixed rates. Chief executive of mortgage broker Finspo, Angus Gilfillan, says fixed interest rates have crossed a “pivotal threshold” dropping below new variable rates for the first time since January 2022.
“The current situation suggests an inflection point, where the market no longer expects interest rate rises to occur in the medium term,” he says.
The average new variable rate has increased 2.5 percentage points to 5.95% in the past year, while the average new fixed rates increased by 1.7 percentage points to 5.8%.RateCity research director, Sally Tindall, says banks have been trying to rein in some of the more aggressive discounts they were offering previously.
She says it’s unlikely that variable rates among the big four will drop 6% until the Reserve Bank cuts the cash rate.
The Worst Of It Is Over For Builders
A lack of skilled workers continues to put pressure on Australia’s housing shortage crisis, according to the Master Builders Association, although Australia’s big builders believe they have come through the worst of it. Master Builders Association CEO, Denita Wawn, says Australia’s economy is still navigating a challenging period. New home building activity is declining with work starting on only 173,755 new homes during FY2023, a 16.5% drop on the previous year.
“In 2023-24 we will see home starts decline by another 2.1% to around 170,100, well below the 200,000 needed per year to meet population growth,” Wawn says.
Meanwhile the head of Australia’s largest home construction company believes most of the industry’s biggest builders are now through the worst of the crisis.
Auctions Remain Strong
Auction clearance rates remain strong as more properties are being offered under the hammer, according to new data. New listings on realestate.com.au are up 20.5% month-on-month in August, according to the latest PropTrack Listings Report,although only 4.1% higher than the same time last year.
PropTrack senior economist, Angus Moore says activity is likely to increase over the spring selling season. “Selling conditions and home prices have also improved compared to late 2022,” Moore says.
“Home prices nationally have continued to recover, posting their eighth consecutive month of growth in August.” He says after a quieter first half of 2023, property market activity appears to be picking up in Sydney and Melbourne.
New listings are up 18.4% in Sydney and 20.8% in Melbourne compared to the same time last year, while Canberra is up by23.2%. Brisbane listings are down 10.4%, Perth is down 8.6%, Darwin is down 5.4%, Adelaide is down 3.3% and Hobart is down 1.8%.Metricon chief executive, Brad Duggan says the industry is now on a more even keel.
“We see build times getting faster and working through the challenges in the market every day we see ourselves getting back to more normalised programs.”