Australia’s real estate market, vibrant earlier this year, is experiencing a cooling trend with more homes listed for sale this spring. The successful auction rate had peaked at 77.2% in June but fell to 64.5% by September, as per Domain data. This decline is attributed to an increased number of listings in major cities, especially Sydney and Melbourne, giving buyers more choices and slowing the price growth rate.
While Melbourne’s auction success rate declined by 1.6% to 64%, Sydney dropped by 1% to 67.4%. Brisbane saw the most substantial fall, dropping 10.7% to 46.2%, returning to its pre-COVID levels, as mentioned by Dr Nicola Powell from Domain. The start of 2023 had fewer properties on sale, with homeowners hesitating due to the preceding year’s price fluctuations. However, the recent surge in listings, especially towards spring’s onset, has diversified options for buyers.
SQM Research revealed significant growth in new listings in September: 12.7% in Sydney, 10% in Melbourne, and 8% in Brisbane. Auction activities also saw a marked rise from the previous year, with Sydney, Melbourne, and Brisbane witnessing increases of 35.1%, 46.2%, and 15.5%, respectively.
Despite the price growth’s moderation, as shown by CoreLogic’s data (Sydney’s values grew by 1%, while Melbourne and Brisbane saw hikes of 0.4% and 1.3%), the market remains lively. Matthew Ward from McGrath Hunters Hill emphasized that seasoned buyers are still keen, contrasting with newer entrants’ caution. Vendors are recalibrating their price expectations in line with market dynamics and interest rate hikes.
Nicholas West from Nelson Alexander highlighted the influx of investment-grade units in Melbourne, noting that many investors are selling due to increasing maintenance expenses. The decreased bidder presence at auctions, down to one or two from the previous four or five, also underscores the changing market scenario.
Westpac’s senior economist, Matthew Hassan, forecasts continued stability without drastic price drops. Migration patterns, both domestic and international, underpin this stability. Hassan also predicts a potential migration to more affordable regions due to rising urban costs.
