Australian Sellers Return as Interest Rates Reach their Peak

Amid signs that interest rates have hit their peak, sellers in Australia are rushing back into the market. Discover the latest developments and trends in the Australian housing market and how sellers are reacting to the changing landscape. Stay informed with this insightful blog post.

In recent months, the real estate market in Australia has witnessed a significant shift as sellers, who were previously holding back, are now making their comeback. This surge in seller activity can be attributed to the widespread belief that interest rates have either reached their peak or are nearing it. Notably, market uncertainty has been a prevalent factor deterring sellers from taking action, along with the challenge of finding suitable alternative properties. However, with a clearer outlook on interest rates, sellers are now feeling more confident about bringing their homes to the market.

According to data from PropTrack, a leading real estate analytics platform, new property listings in Sydney and Melbourne experienced an unseasonably strong surge during the month of July. The number of new homes available for sale during this period exceeded the typical figures seen over the past decade. This mid-winter rush has resulted in a reasonably high number of properties listed for sale in major cities like Sydney, Melbourne, Canberra, and Hobart. These figures have remained consistent with, or within 10% of, the average over the prior decade.

However, in other capitals such as Perth, the supply of available properties remains limited, with the total number of listings hitting a new record low. This scarcity of options has created a tighter market for potential buyers, amplifying the competition for properties in the area.

The REA Group's extensive 2023 Property Seeker Survey, which is the largest property survey in Australia, reveals that while approximately one million Australians intend to sell their homes, only a quarter of them plan to follow through. The leading reason for this change of heart among respondents in the past 12 months has been market uncertainty, accounting for 36% of the cases. Other factors include a loss of interest in moving (25%) and unmet price expectations (24%).

Despite the prevailing uncertainties, the overall sentiment in the property market is expected to improve and support growth throughout the rest of 2023 and into 2024, as suggested by PropTrack's latest Property Market Outlook Report. The report forecasts a potential rise in national home prices ranging from 2% to 5% in 2023. However, Cameron Kusher, the Director of Economic Research at REA Group, emphasizes the challenges in predicting market trends beyond the upcoming spring selling season and into the following year.