The property market is tipped to see hot buyer demand over the spring selling season, but sellers are not as keen to let their properties go in an uncertain market, new research shows.
While spring has traditionally been the bumper season for the property market, with real estate listings usually higher in spring than in other times of the year, buyers may be facing slim pickings this year.
Nearly two thirds of Australians with plans to buy a property in the next 12 months are thinking of making a purchase this spring, according to a survey of more than 700 prospective buyers commissioned by Gateway Bank.
Millennials account for almost three quarters of serious buyers.
Many believe that the odds are in their favour this year, with more than 60 per cent of poll respondents expecting bargains in the coming months due to the pandemic’s impact on the market.
Gateway Bank chief executive officer, Lexi Airey, said the pandemic has not had the same impact across all Australians.
“COVID-19 may have delayed home buying plans for some Australians, while others believe it will give them the opportunity to fast-track their purchasing plans,” she said.
“That said, buyers should be financially and mentally prepared so they can move quickly should the right property be listed at the right price.”
Nearly half of survey participants believe buyers will come out ahead in the spring selling season, but less than a fifth reckon they will see a seller’s market.
However, tumbling housing prices and uncertainty around the wider economy are front of mind for buyers, with 86 per cent hesitant about the real estate market.
Sellers hold off temporarily
Sellers appear aware of this sentiment. Just over 40 per cent of those with plans to offload their properties in the coming year intending to sell this spring, suggesting that a large proportion are putting their selling plans on ice.
Ms Airey said the tepid seller confidence could affect the level of supply available this spring, which may not be able to meet buyer demand.
“While many home buyers are positive about market conditions coming into the spring selling season, we are seeing sellers remain cautious,” she said.
“The research shows there are two clear and opposing perspectives and this may lead to demand outstripping supply.”
Ms Airey warned buyers to prepare themselves for potentially difficult competition in the coming months.
“Although home buyers consider themselves to be better placed leading into what is traditionally the busiest period for real estate, if sellers hold off, this may heighten competition among buyers for their ideal property,” she said.
“It could also lead to some tough negotiation around prices.”
Green shoots emerge as listings begin to nudge up
However, there are early signs that seller sentiment may be improving gradually. While new listings volumes are 35 per cent lower than the previous four-year average, new ads edged up by 0.7 per cent in the four weeks to September 20, according to the latest CoreLogic data.
Sydney took the lead in listings volume among the capital cities, with a leap of 382 new listings, while Perth and Brisbane saw 286 and 235 properties added to the market respectively.
Newly advertised homes in Melbourne declined by a staggering 935 listings, though this has eased from the near 3,000 plunge in listings during the previous four-week period.
Every capital city except Darwin and Melbourne saw a lift in the number of listings on the market.
The surges in listings are unlikely to be caused by distressed sales, according to Eliza Owen, CoreLogic’s head of Australian research.
“This (increase in listings) signifies that vendors may be more confident in selling their property,” she said.
“The exceptions were Melbourne, where transaction activity is understandably constrained by stage four restrictions, and Darwin, where listing numbers are generally lower and more volatile.”
Ms Owen added that the data indicates that the spring selling season could be picking up, after a “subdued start”.
With mortgage lenders luring borrowers with reduced interest rates, discounts and cashbacks, some home buyers are expected to potentially benefit from the current environment.
Sally Tindall, research director at RateCity, said it was “unlikely” that home loan rates have hit the bottom, ahead of a forecast rate cut from the Reserve Bank of Australia in coming months.