To Sell Now Or Wait Until 2023? [Spring 2022 Update]
Spring is generally the season of optimism for the property market with an influx of people preparing their houses for sale to make the most of a booming market, keen buyers and hot prices.
But, here’s the kicker, we haven’t seen a real estate market like the one playing out in front of us for a number of years.
New figures released by CoreLogic and the Reserve Bank of Australia’s (RBA) latest statements and indications show if spring 2022 actually has been such a unique proposition for buyers and sellers.
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What were the experts predicting for spring in 2022?
Throughout the year, our capital cities and regions have been experiencing different degrees of change in the property market, but there were five key trends that were anticipated for this season.
1. New listings and auctions would rise
In the 28 days leading up to 4th September, there were 35,213 new listings advertised across Australia, which is higher than the equivalent period in 2021, 2020 and 2019.
2. The seasonal uplift in new listings would vary between regions
In the five years prior to the pandemic, new listings campaigns nationally have increased 19.6% on average between winter and spring. The seasonal bump varies between cities, with cooler climate areas like Canberra (42.4%), Adelaide (33.7%) and Hobart (31.6%) typically seeing a larger seasonal effect than more temperate markets.
3. It wouldn’t be the bumper spring selling season experienced in previous years
Coming into spring 2022, market conditions are very different. Buyer appetite is falling against higher interest rates, properties are taking longer to sell, and vendors are having to offer greater price discounts in order to get deals done.
4. Long-term occupiers most likely to sell
This is because recent buyers are at more risk of making a nominal loss if they sell during a downturn. Meanwhile, those who have held their property for longer are more likely to have made nominal gains, even if the market is going through a short-term, cyclical downswing.
5. Sellers will have to listen to buyer feedback and be flexible on price
Serious vendors will need to be realistic about their price expectations and ensure they have a quality marketing campaign behind the property in what is likely to be a more competitive selling environment through spring and early summer.
Five things to know for the 2022 spring selling season – CoreLogic
Let’s look at what actually happened
Right off the bat, we can say that the geographic scope of Australia’s housing downturn broadened through October with every capital city and regional area – apart from regional South Australia – recording a drop in housing values.
CoreLogic’s national Home Value Index (HVI) showed six months of consistent drops, as values fell a further -1.2% last month.
The pace of falls has eased over the past couple of months in Sydney and Melbourne, but has “gathered momentum” in Brisbane where house prices are now falling at a faster rate than any capital city.
At the combined capital city level, housing values have fallen -6.5% following a 25.5% rise through the upswing. Sydney home values are down -10.2% since peaking in January (after a 27.7% rise) and Melbourne values down -6.4% since February (after rising 17.3%).
Tim Lawless, CoreLogic’s Research Director, says it’s probably still too early to claim the worst of the decline phase is over.
However, what is safe to say is that some capital cities are faring better than others – for now at least.
One leading agent from Ouwens Casserley Real Estate in Adelaide says although it’s been a late start to the spring season, which is quite unusual, November is proving to be a bumper month.
And while there are definitely fewer bidders turning up on the day of auction as opposed to previous years, houses are still getting sold with no real notable drop in prices.
Time will tell as to whether this trend continues.
As CoreLogic warns, despite the easing in the pace of decline, there are other factors at play which may hamper this slowdown.
“With Australian borrowers facing the double whammy of further interest rate hikes along with persistently high and rising inflation, there is a genuine risk we could see the rate of decline re-accelerate as interest rates rise further and household balance sheets become more thinly stretched”, Mr Lawless said.
The slower start to the spring season correlates to the latest CoreLogic data which shows the flow of new listings starting to trend higher in October, but traditionally, the season is staying well below levels at the same time last year and relative to the previous 5-year average.
REA, owners of realestate.com.au, recently confirmed that national residential listings in October were down 18% on last year, with Sydney listings down 31% and Melbourne down 29%.
And Eleanor Creagh, PropTrack Senior Economist agrees with this sentiment that more homes will be on the market in line with seasonal trends, but there’ll be fewer buyers due to interest rate hikes.
“Though activity will still be muted relative to last spring, the second half of spring usually brings the seasonal peak in activity,” she said.
A season of perspective – swings and roundabouts
In our last article outlining the property forecast for 2023, we established it’s not all doom and gloom amid unprecedented talk for many years around interest rates and prices.
On the demand side, the estimated number of home sales has held reasonably firm through the first two months of spring.
Based on modelled sales over the three months ending October, capital city home sales were -16.6% lower than a year ago and 3.8% above the previous five-year average for this time of the year.
“The number of home sales is well down from the highs of late last year, however the fact that sales activity is still above the five-year average over the past three months reflects a base level of demand remains for housing,” Mr Lawless said.
It’s a matter of keeping things in perspective.
Housing values across most of the country remain well above pre-COVID levels, meaning we’re still in a better position now than when property was initially purchased.
So should you bite the bullet or hold off selling your property?
The answer to this is going to be based entirely on your individual circumstances and need – and weighing up all the latest information and pros and cons.
The best advice would be speaking to an expert real estate agent to find out what exactly is happening in your local area.
Call our local expert team on 1300 665 557 or compare agents now to connect with experienced, local agents.
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