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It’s been a blistering hot start to the year for Australia’s property markets and agents have been heartened by strong clearance rates, lifts in the numbers of listings and strong buyer demand.
And with a cut in interest rates on the horizon either later in 2024 or early in 2025, there’s a new optimism flooding the industry.
“I think there’s a great deal of confidence around at the moment,” said Anthony Birdsall, director of Sydney’s Laing Real Estate. “A lot of empty nesters are still coming out of larger properties, and the bank of Mum and Dad is working hard for first home buyers with the number of times parents come in with their kids just incredible.
“At the same time, many investors are offloading smaller properties because, while rents are high, the costs of holding those are high and the net returns aren’t so good. So there’s a lot of buying and selling happening, and it’s much more like a normal, steady-as-she-goes market now.”
That story of a strong first quarter of 2024 is being repeated regularly in all the capital cities. In Melbourne, Peter Kudelka, director of Kay & Burton, is similarly upbeat. “I think there’s a growing confidence now and while there are still sectors that are subdued, the overall outlook is generally positive and we’re looking forward to a strong middle of the year,” he said.
“The family home market is going particularly well, and the auction clearance rate has been strong, generally over 70 per cent. The bottom end of the market in the investment stock is tougher, with a lot of investors putting their properties on the market because of changes in regulations and government taxes. But once there are interest rate cuts, that will pick up again.”
Indeed, all the data indicates a bumper beginning to 2024, with activity that’s continued right through to the end of the first quarter. Listings have been up in most capital cities, with Canberra house listings up a huge 44.2 per cent on the year on Domain figures.
Melbourne’s are up 28.2 per cent, Sydney 23 per cent, Adelaide 10.7 per cent, the Gold Coast 5.8 per cent and Brisbane 5 per cent. Only Darwin was down 13.2 per cent, Perth by 9.5 per cent and Hobart by 2.9 per cent.
Unit listings are generally also up – Canberra by 44.5 per cent, Sydney by 40.8 per cent, Perth by 18.2 per cent, Melbourne by 10.6 per cent, Hobart by 9.3 per cent and Adelaide by 7.1 per cent. Brisbane’s were down slightly by 2.9 per cent, while the Gold Coast had 13.4 per cent fewer listings, and Darwin 16.1 per cent.
Clearance rates have been mostly strong too around the country, Domain reports. In Sydney, at the end of March, they were sitting at 70 per cent – as against 65 per cent this time last year – in Canberra not far behind at 67 per cent, up from 48 per cent last year, and both Melbourne and Adelaide at 61 per cent. Brisbane was just at 47 per cent, but that’s still better than the 40 per cent last year.
“We’ve found the Brisbane market is performing strongly at the moment,” said Pat Goldsworthy of Ray White New Farm. “We’re now selling a lot under the hammer and clearance rates are rising. Buyers are acting quickly because they realise, when interest rates do go down, there’ll be a lot more competition in the market.
“We’re finding demand has now caught up with supply and newbuilds are performing particularly well. There’s been a huge shift in people now not wanting to build or do renovations because of costs and timelines and not wanting to go through that pain. And, of course, interstate migration from Sydney and Melbourne is still staggering, with 700 to 800 extra people now coming to Brisbane a week.”
Canberra is currently one of the hottest markets, and that’s being felt by all the ACT agents. “We’re seeing an increase in the number of bidders at each auction now,” said Bree Currall of Belle Property Canberra. “At one action on the weekend, we had 23 registered bidders.
“It’s been so competitive; we’re seeing a lot of homes selling for over what’s being quoted. A colleague had one in Barton that sold 25 per cent higher than expected, while another in Kingston went for 17 per cent over the asking price. The year was slow to start, but it’s really been boosted now.”
In Perth, there’s also been strong demand for property with 40 groups coming through one property in the first week it was listed, reports Peter Robertson, director of William Porteous Properties International.
“The market is very positive over here,” he said. “We have very low unemployment and a strong economy. Everyone is feeling very good about the present and very confident about the future.
“Houses, apartments, blocks … they’re all int demand. Anything where the property is right and is priced reasonably and is in a good location is selling in a very vigorous market; niche properties are probably slower to find an audience. We’re predicting prices will rise 10 per cent this year, and a little less for top end properties over $5 million.”
That expectation of an interest rate cut before too long is fuelling a lot of extra optimism, believes Lloyd Lawton of Jellis Craig in Melbourne.
“That’s giving buyers the confidence to jump in,” he said. “The top end has been a bit of a sellers’ market, but the middle market has seen multiple bidders and we’ve seen a lot more stock than we have in the past.
“Renovated family homes are very popular, but we’ve even seen unrenovated homes starting to sell now, while apartments are still tough because of over-supply and the costs of holding investor stock.”
Properties that need renovation work are certainly making buyers feel more conservative in Sydney as well, believe Matt Hayson of Cobden Hayson Real Estate.
“But the cream always rises to the top,” he said. “Any A-grade property with a good aspect and a good floor plan will do well, whereas B-grade homes that need some work to unlock their value sometimes involve an arm-wrestle over price.
“Bigger family homes are in strong demand. People are enjoying staying at home much more since COVID, and are often happy to eat, work, sleep and be entertained at home with streaming services. We’ve moving forward with confidence.”
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