Key takeaways:
Buyers may have more choice. Total property listings were 14.9% higher than a year earlier in early August, although conditions vary by market.
Homes are taking longer to sell. The national median selling time was 35 days in the three months to July, which may mean less urgency for some buyers.
Some sellers may be more open to negotiation. Vendor discounting has widened, but the room to negotiate will depend on the property and local competition.
More negotiating power doesn't mean greater affordability. Borrowing capacity, interest rates, repayments, deposits and personal circumstances still matter.
For home buyers who have spent recent years rushing between inspections or competing with multiple bidders, the property search may be starting to feel different.
National indicators point to softer selling conditions, with homes taking longer to sell and vendor discounting widening, although conditions vary by market.
Aussie Buyer’s Agent Amanda Baldacchino said she was seeing that shift in some of the markets where she works.
“A lot of the markets are becoming a little bit more buyer-friendly,” she said.
“Before, it was just submit offers. But now there's actually room to talk. There's often room for negotiation.”
That does not mean Australia has suddenly become a buyers' market. Conditions can vary significantly between cities, suburbs, price points and individual properties.
Spring often brings an increase in new listings, although the size of the lift varies from year to year and by market., the coming months could provide a clearer indication of how the balance between buyers and sellers is changing.
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More choice could give buyers breathing room
Cotality’s August Housing Chart Pack recorded 135,008 properties advertised for sale nationally over the four weeks to August 9, up 14.9% from the same period last year.
Importantly, new listings were only 1% higher year-on-year, with Cotality attributing the rise in total stock to easing buyer demand rather than a surge in new listings.
If the usual spring lift in new listings occurs while existing stock remains elevated, buyers in some markets could have more properties to compare.
Baldacchino expects spring to bring more activity, but said there was still uncertainty on both sides of the market.
Some prospective sellers are questioning whether now is the right time to list, while some buyers remain hesitant to commit.
That means conditions this spring may depend not only on how many properties are listed, but also on how buyer demand responds.
Three signs buyers may have more negotiating power
1. Properties are taking longer to sell
The national median selling time increased to 35 days in the three months to July, up from 29 days a year earlier, according to Cotality. Across the combined capitals, the median increased from 26 to 33 days.
National median selling time does not guarantee extra time on a specific property. It also avoids implying buyers can delay due diligence because the broader market is softer.
Aussie Broker Scott Adams said some buyers were no longer feeling the same fear of missing out seen in hotter markets.
That may reduce some time pressure for buyers in softer markets, although competition can still vary property by property.
2. Vendors are discounting further
Nationally, Cotality's median vendor discount widened to 3.8% in the three months to July, compared with 3.4% a year earlier. Across the combined capitals, the median discount was 3.9%.
That does not mean every buyer should expect to negotiate the same discount.
Property quality, asking price, location and buyer competition can all affect the final sale price.
Alongside longer selling times, wider vendor discounts may indicate there is more room to negotiate in some markets.
Baldacchino said the change was already noticeable in some areas.
“A lot of markets are still quite busy, but there's room to breathe,” she said.
3. Buyers may feel less pressure to compromise
Not every sign of a changing market appears in the data.
Adams said some of his Sydney clients were able to consider areas or property features they may previously have ruled out because of price or competition.
Having more suitable properties to consider may also reduce some of the pressure to compromise on a home that does not suit a buyer's needs or budget.
Baldacchino said buyers should use any additional time to become better informed rather than assuming softer conditions make every property a good opportunity.
“The more informed you are, the better decision you can make,” she said.
More negotiating power does not necessarily mean greater affordability
More negotiating power may change the price a buyer pays, but it does not necessarily change how much they can borrow or comfortably repay.
Interest rates, income, living expenses, other debts, deposit size and lender assessment criteria can all influence borrowing capacity.
The Reserve Bank of Australia (RBA) kept the cash rate at 4.35% in August following three increases earlier this year, meaning borrowing costs remain an important consideration for prospective buyers.
So even if a buyer negotiates a lower purchase price, they still need to consider whether the loan amount and estimated repayments fit their circumstances.
Adams said he encourages clients to model different scenarios before settling on a purchase budget.
“Speak to your broker and workshop various scenarios to make sure you're buying at the right budget for now,” he said.
An Aussie Broker can help buyers understand their borrowing power, compare home loan options and model how different purchase prices could affect their estimated repayments.
Should buyers wait for spring?
There is no guarantee spring will create better conditions for every buyer.
More listings may provide greater choice, but spring can also bring more buyers into the market.
Rather than trying to pick the perfect time to buy, prospective buyers may wish to focus on the factors they can control.
That can include understanding their borrowing capacity, setting a realistic budget, researching comparable sales and watching how quickly suitable properties are selling in the suburbs they are considering.
Having finance organised before making an offer can also help buyers understand their budgets and limits.
As Baldacchino put it:
“Have your finance in check, your pre-approvals. That's obviously number one.”
Whether conditions become more favourable for buyers this spring will vary from market to market.
For prospective buyers, the more important question may be whether they are financially prepared, have a clear understanding of what they can afford and are ready to make an informed decision when a suitable property comes along.