Corelogic recently featured two articles, one an assessment of the recent Spring selling season and the other regarding the impact of recent interest rate rises on the housing market.
Below is a summarised extract of their findings:
. Less stock – for 10 years prior to the pandemic, there was on average a 21% increase in new listings nationally between winter and spring. This Spring freshly listed properties fell nationally for the first time in 12 years.
. Property values have declined. Amid the fastest rate-tightening cycle since the 1990s, home values declined -7% from April through to the end of November. This is the steepest decline in home values on record and represents an equivalent fall of around $53,000 in the national median home value.
. Selling conditions have changed in favour of buyers. In the 3 months to November 2021, the median amount of time a property was on the market before selling was 20 days. This increased 35 days in the same period of 2022. Similarly, vendor discounts from the initial listing price have also deepened from -2.9% in the three months to 2021, to -4.3% in the Spring of 2022.
. Many buying and selling decisions were made last year. COVID-19 warped the spring selling season of 2021, with record-low interest rates creating a buying frenzy. There was likely also an element of ‘catch up’ at play, with extended lockdowns across Melbourne and Sydney putting a dampener on transaction activity through 2020 and 2021. Given an unusually high volume of properties transacted last year, this may have had a slight vacuum effect on buying and selling decisions in 2022.
. New dwelling approvals continued to trend lower over October, and although rental markets remain very tight, the rate of growth in rental values has started to ease slightly in some markets. Quarterly growth in capital city rents peaked at 3.1% in July and has since eased to 2.5% in the three months to November.
. The impact of recent rate rises on housing is flowing through to lower volumes of new mortgage finance secured. From May to October of this year, the monthly value of secured finance declined -17.9%.
. Annual sales volumes have trended -13.3% lower compared to this time last year. Consumer sentiment through November also dropped a notable -6.9%.
. At 3.1%, the cash rate has now entered the lower bound of major bank forecasts for a peak in the cash rate, with forecasts made in October ranging from 3.1% to 3.85%.
. The higher rate environment will test housing market conditions in 2023, when the majority of outstanding fixed-term mortgages are expected to expire.”
WHAT HAPPENED TO THE SPRING SELLING SEASON AND WHAT LIES AHEAD by Jonzun Lee
Jonzun Lee is a trusted Brisbane real estate consultant and Licensed Real Estate Agent. Please contact Jonzun on 0418 885 708 for further information regarding your property needs.
Source: Eliza Owen, Head of Residential Research at Corelogic, 5th & 6th Dec 2022
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