Buyers and Sellers Market​ - Signs of Easing

In good news for buyers, the first couple of months of 2022 have shown signs that the strength of the seller’s market is beginning to ease. Although activity remains steady, there are certain signs that indicate the market is leaning away from favouring sellers and more towards a balance between sellers and buyers.

We explore why the market is softening for sellers and how buyers can take advantage and make their move towards securing a new home.

Buyers market – more homes and less demand

In 2021, the seller’s market saw a surge in demand for freestanding homes, driving prices up. Now, with more homes available, the market is shifting. While it’s still a seller’s market, buyers have more options, and sellers may need to adjust expectations or invest in renovations to stand out.

Downsizers have embraced this trend, trading larger spaces for less land or apartment living, while gaining more cash in hand. With an increase in homes for sale, the market now leans more toward the buyer, narrowing the gap between buyers and sellers. Though homes are still selling, competition is lower, and sellers may need to lower their price expectations or invest in renovations to remain competitive in a saturated market.

Uncertainty around rate rises

With the imminent threat of interest rates rising, buyers are reluctant to purchase until they know what they will be forking out each payment cycle. It was reported that in the closing months of 2021, views-per-listing on realestate.com.au declined by 9%, indicating interest in the market had waned and that previously interested buyers are now holding off until the banks have announced their plans and reintroduced pre-covid interest rates.

For those who are buying, price growth is expected to slow as purchasers become more cautious of stretching their budgets.

Prolonged days-on-market figures

At the height of the current market, homes were selling within hours of being listed, if they even made it that far. Many homes were selling prior to auction or even off-market as agents were able to sell direct to their databases or buyers’ advocates as soon as properties became available. At the end of 2021, the median number of days a property was listed for dropped to a record low of 30 days, however, industry experts are expecting this number to rise as demand slows and supply increases.

Pre-COVID conditions cease to exist

Australia’s borders re-opening for international travel may seem like a far-fetched reason for the housing market to shift, but border closures in 2020 and 2021 were one of the key reasons why more Australians entered the property market or upgraded.

Money usually spent traveling was packed into mortgages or savings accounts, allowing homeowners and buyers alike to upgrade or buy homes. Now that life is relatively back to normal, people are reverting to their old spending habits and putting the breaks on their savings. This will mean less money being fed into the market and less competition surrounding the available properties.

Similarly, with most states coming out of lockdown, the delays and disruptions that meant properties were being listed more slowly and causing banks to take their time in approving loans added a sense of urgency and competition to the market that no longer exists. The more relaxed conditions are having a flow-on effect on the attitudes of buyers who are now able to take their time to purchase properties as the fear of missing out diminishes.

If you are considering buying or selling a property our team of experienced conveyancers and property lawyers can help. Contact our team on (07) 4052 0780.