Have you missed the boat?

I am constantly analysing the property market on the frontline, and the optics are positive from where I am sitting, however I am always seeking advice from property experts, so I called Nerida Conisbee, Ray White’s chief economist, this week to get the answer to the question everyone’s asking: have I missed the market as a seller?

Here’s what she had to say.

1. Price growth is set to continue.

“Price growth since the start of the pandemic has been unprecedented. Not only in its strength but in the way it’s been so consistent across Australia. Whether you’re in a regional area, inner city, or outer suburb, we’ve seen increases. It would  be rare to find anywhere not impacted by this pandemic-driven boom,” Nerida told me.

“With strong price growth comes big increases in home loans so it was no surprise that the Australian Prudential Regulation Authority (APRA) stepped in late last year to put the first set of restrictions in place to slow things down. While the restrictions are currently mild, we’re likely to see further restrictions if they don’t work as hoped. Furthermore, although an interest rate may or may not happen this year, there’s a growing realisation that they will possibly increase more  quickly than anticipated. These things combined have led to a gradual shifting in sentiment towards property and this  is likely to slow down price growth.”

“While it’s almost certain that price growth will be slower this year compared to last, at this stage, we’re not looking at a decline in prices. APRA is moving carefully and higher inflation is not surprising to anyone, least of all the Reserve Bank of Australia (RBA). Confidence in property remains high and we’ve now reopened international borders which will once again lead to population growth rates we are more accustomed to, further supporting property demand. This year will be a growth market, but it will also be a much calmer market than 2021. “

2. Demand remains high.

“It’s hard to measure demand for property. Price growth, for example, means that there was strong demand for property, but doesn’t necessarily mean that it’s still there. One metric that we track closely is active bidding at auction. If you bid on a property at auction, it’s a pretty good indication that you’re in the market and ready to buy. At the end of 2021, we saw the highest level of active bidding ever recorded.”

“While we’ve never seen so many people bidding at auction, active bidders per auction have declined in NSW and Victoria, however Queesland, in particular Brisbane’s numbers, remains higher than our southern states. This reflects more properties coming to market as Melbourne and Sydney came out of lockdown. At this point, it does look like the main driver of slowing market conditions, particularly in our biggest cities, is being driven by more properties for sale, as opposed to a drop off in people looking to buy.”

This is good news for Queenslanders.

I hope you enjoy the read.

Matt Lancashire