The Australian market is high functioning with high turnover, with not too much of a gap between buyers and sellers. We know we’re in a new cycle but there are a number of reasons why prices aren’t likely to drop dramatically. Since the RBA flagged the start of their monetary policy tightening cycle, borrowers were told to expect four to five interest rate rises. As a group we take nothing for granted and know we can achieve competition for property in any market. We’ve been in business for 120 years and right now we continue to defy the headlines. The fact is people buy and sell houses every day. They upsize, downsize, move away and move home as everyone’s personal circumstances are different. Selling is a personal decision.
Some pundits are now predicting up to 20 per cent price falls in some markets off the back of the supersized, inflation-busting rate rise. These were also the same pundits who were predicting 30 per cent falls at the start of the pandemic. They were so wrong. We’ve always said that we don’t have a crystal ball to predict the future and we’ve never been one to speculate. We work in the ‘now’. More worrying is a prolonged period of high inflation – which will no doubt lead to lower rates of household saving and may potentially weaken a prospective borrower’s ability to meet serviceability assessments from lenders.
What we know right now is that our all critical appraisal numbers are up 62 per cent on two years ago and 22 per cent higher than last year. This gives us confidence that the spring pipeline is looking strong. Stock is rising. Our open homes numbers remain sound (10 per cent higher foot traffic than one year ago but still 22 per cent lower than two years ago during the height of the pandemic). Our volume of sales are also up on two years ago too. Scheduled auctions across our group remain higher too over the last two years, and since polling day our clearances are climbing back to the mid-60 per cent ranges – which is actually slightly above our long term average. The average days on market right now is 37, which is still a week shorter than it was five years ago.
Our job has always been the same. To create competition for our sellers – and we can do that in any market. The process remains the same to market our properties as far and widely as possible for our sellers. We’ve never lost sight of that.