No matter whether you’re planning to buy or sell, we explain how to make the most of today’s property market conditions right across Australia.
Tim Lawless, Research Director Asia Pacific at CoreLogic, says a key indicator of whether your local market favours buyers or sellers, is the volume of properties currently listed for sale, also known as “stock on the market”.
With this in mind, let’s see how things are shaping up for buyers and sellers across the nation.
Unlike Sydney or Melbourne, Brisbane hasn’t really experienced a strong growth run, and Tim says the Queensland capital “has largely been in favour of buyers for more than ten years”. That means vendors still need to be realistic about their price expectations in order to secure a sale (good news for buyers). Nonetheless, Tim cautions, “Stock levels in Brisbane are falling, and this means buyers may have less choice over the properties available for purchase.”
On the plus side, Brisbane’s apartment market has seen an uptick in values after a long run where local unit values were either falling or flat. As Tim explains, “The construction cycle for units peaked two years ago and there hasn’t been a lot of additional stock built since.” The upshot is that the unit market is starting to improve – certainly a plus for sellers.
It’s no secret that property values in Sydney are cooling, but does that mean it’s a buyer’s market? Tim points out that home owners in Sydney have enjoyed a good run of price gains over two cycles since 2009, but right now, stock levels in Sydney are up by 21% since last year.
However, there’s a twist. Fresh listings in Sydney have fallen by 11%, meaning some properties have languished on the market, leaving buyers well-placed to negotiate on price. As Tim points out, “It’s the top end of the market that is feeling the squeeze. In the affordable end of the market, activity among first home buyers has risen which is supporting further price rises or at least keeping a floor under property values.”
It’s a case of business as usual for the nation’s capital. Tim notes, “Incomes in Canberra are high, so the affordability constraints aren’t as pressing as in other cities”. With stock levels up just 1.4% since 2017, there are no real changes to the market, leaving buyers and sellers equally well placed to secure a good deal.
Melbourne’s property market has definitely slowed, with values down 1.2% in the three months to May 2018. It’s only a small shift but Tim says the market peaked in November 2017, and today “stock levels in Melbourne are up 9% on the same time last year”. As Tim explains, this suggests “buyers have more options, less urgency, greater choice and more room for negotiation.”
Tasmania’s capital gets a definite tick for being a seller’s market. “We’ve never seen such low stock levels in Hobart,” says Tim, “Listings are down 28% since last year.”
But here’s the thing. Tim believes that FOMO (fear of missing out) could be a driving force in the Hobart market – more so because only 29% of Hobart’s mortgage demand is investment related.
“We’re seeing a lot of lifestyle and holiday home buyers in Hobart,” explains Tim. “Other buyers are looking for an affordable home.” However, as rapid price growth erodes the price differential between Hobart and mainland markets, sellers need to be aware that the pendulum could start to swing in buyers’ favour.
The South Australian capital is renowned for its sure and steady property market, and according to Tim Lawless, Adelaide’s property market is evenly balanced between buyers and sellers. He notes, “Stock levels in Adelaide are down 4% but both selling volumes and values are reasonably flat.” Tim observes that if Hobart values keep trending higher, Adelaide may soon become the nation’s most affordable capital city.
“Very much a buyer’s market”. That’s Tim’s verdict for Perth, where falling stock levels are helping the market level out. Dwelling values across the Western Australia capital remain almost 11% lower than their 2014 peak. Nonetheless, Tim points out that Perth property values are gradually picking up, presenting an opportunity for buyers to potentially get in at the bottom of the cycle, and the pendulum could gradually swing in sellers’ favour.
It’s certainly been a buyer’s market in Darwin, with values in the Top End capital down 7.9% over the last 12 months “We are seeing some signs of levelling out in Darwin,” says Tim. He notes that as a smaller market, Darwin property values are more volatile, but the good news is that over the last three months stock levels have fallen – though mostly for detached houses. “Apartment values are still 30% lower than their 2014 peak” adds Tim.
The bottom line
As Tim explains, if you’re a current home owner now could be a good time to upgrade or downsize, as long as you’re buying and selling within the same market, and there is only a small window of time between selling your current home and buying a new place. More broadly, in areas where stock levels are high, buyers are “well and truly back in the driver’s seat,” says Tim.
How do you know what’s happening in your patch? That’s easy. Set a date to meet with your local Aussie Broker to receive a free CoreLogic property report and get a suburb-by-suburb view.
You may also be interested in James Symond’s Quarterly Market Outlook: June 2018, Australia’s top performing suburbs for long term price growth and Have housing prices plateaued?