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Sales Volumes Rebound Despite Rate Rises

The focus of the housing market has largely been on rebounding prices and low stock available for sale, however the lift in sales volumes is another key feature to look toward.

Preliminary sales are a weekly snapshot of sales advised by real estate agents.

While it isn’t a full set of sales, it encapsulates most and serves as a timely indicator. In Brisbane, the number of preliminary sales in May 2023 was the highest for any month since May 2022.

Preliminary sales were up 50.1 per cent compared with May 2019 and up 90.3 per cent from May 2020.

However, preliminary sales were down 10.8 per cent on levels in May 2021 and 0.7 per cent lower than May 2022.

Sales volumes over the most recent three months of 2023 have consistently been much greater than they were late last year.

This is despite interest rates being higher than they were throughout 2022 and increasing a further two times to May 2023.

The rebound in sales activity across Brisbane has been so strong that preliminary sales in May this year were higher than a year ago in several regions of the city.

Brisbane North (42.1 per cent), Brisbane Inner City (35.3 per cent) and Moreton Bay North (7.2 per cent) had a higher number of sales than a year ago, while Ipswich (-21.5 per cent), Moreton Bay South (-14.8 per cent) and Brisbane East (-13.6 per cent) recorded the largest falls.

Inner areas of the city, where property prices are typically higher, are tending to see the strongest recovery in preliminary sales this year.

The outer, more affordable areas of Brisbane, have seen sales volumes rise relative to late last year, although the rebound has been more muted.

With interest rates continuing to rise as we shift into the quieter winter months, we may see a slowing of sales volumes, particularly if stock hitting the market sees its typical seasonal lull.

Cameron Kusher is executive director of economic research at REA Group and a respected market commentator