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Spring is always considered one of the country’s biggest seasons for real estate, but how will current economic conditions make a mark on the warming months?
The latest CoreLogic analysis reveals a decade average increase in fresh listings during spring of 18.2 per cent, with an uplift in sales of 8.3 per cent, led by cities across the east coast.
As CoreLogic’s head of research Eliza Owen reported, cities with colder temperatures in winter generally benefit from the biggest burst of activity in spring, with Melbourne experiencing a 26.7 per cent increase in listings and a 10.5 per cent lift in sales, Sydney seeing 20.3 per cent more homes on the market and 10.4 per cent more sales, and Hobart benefitting from a 27.9 per cent listings bump and 12.3 per cent more sales on average across the decade.
However, that’s in a “business as usual” market. Owen noted that with interest rates remaining at the highest levels in recent history, this year is anything but.
“Seasonal factors can still be tempered by broader market conditions like interest rates and economic conditions. Sales volumes across some cities have actually declined during spring when the market has been in a downswing, such as in Sydney and Melbourne in the spring of 2015, 2017 and 2018, when temporary macroprudential rules created a sharp decline in investor demand,” she explained.
Looking at spring of 2024, the data firm is tempering expectations against high interest rates, slowing economic conditions and low consumer sentiment.
Looking inside the listings data
CoreLogic assesses buyer and seller conditions by considering the number of homes sold against the number of properties newly advertised for sale in the same period.
The three months to July 2024 recorded an estimated 124,500 sales against 123,000 new listings added to the market for sale, indicating that there are more buyers currently active than sellers nationally, and therefore demand is still outpacing supply.
The 2024 spring market is also looking to have a greater measure of stability – despite high interest rates – than earlier in the year or spring of 2023. CoreLogic noted that sales and new listings in the past three months have been overall more balanced over this period than a few months ago, with the three months to April 2024 recording 142,500 sales against 128,000 new listings. During the winter months of 2023, 123,000 sales took place with roughly 112,000 new listings in the market.
Capital speeds vary
Looking at the major markets, however, there are several factors that are causing some of the nation’s biggest cities to deviate from the national narrative.
Melbourne is currently experiencing one of the biggest discrepancies between sales and new listings, with 5,400 more new homes added to the market in the past three months than sales taking place. This suggests the Victorian capital will head into spring with buyers sitting in the driver’s seat.
It’s the opposite case in Adelaide and Perth, where sales vastly outpaced the number of new listings added. As Owen explained, the urgency in these capitals is particularly evident, with the median selling time for Perth dropping to “just 10 days in the three months to July”.
In Adelaide, median days on market was higher at 28 days, but that still represents a decrease from this time last year when homes were selling after an average of 33 days.
According to Owen, sellers are expected to continue to have the upper hand in the Western Australian and South Australian capitals in the coming months, but some suburbs in other capitals may similarly present strong vendor conditions, based on the level of stock currently in the field. More affordable markets in Brisbane, such as Beaudesert for example, are desperately in need of new listings and sellers may be rewarded for striking while the iron is hot.
Conversely, high stock levels in Melbourne and Hobart may mean that some buyers will do well to wait, particularly with a wealth of options for buyers present in Sunbury in Melbourne and Brighton in Hobart.
Looking ahead, Owen said that 2024 is expected to somewhat follow the normal spring trend with an anticipated rise in new listings, but she cautioned that “a lift in demand may not occur at the same time”.
Spring, she said, will be a telling season for the current pace of home price growth.
“If we do see advertised stock levels rising through spring, it’s a good sign that we may see some further momentum leave the upswing in the Australian dwelling market.”
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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