Industry experts believe that the market will be all the more fruitful in spring
Property listings across Australia’s largest cities leapt by over 9%, according to PropTrack‘s Listings Report July 2023. This uptick was observed across the eastern seaboard prior to the typically busier spring months. “Property market activity is showing early signs of picking up in Sydney and Melbourne amid what is typically the quieter winter season,” said PropTrack senior economist and report author, Angus Moore. “Australia’s two largest property markets both saw more new listings than has been typical on average for mid-winter over the past decade.”
A July uptick was also observed by Raine & Horne, with the real estate agency recording a 10% increase in attendance at open for inspections (OFIs) in July, compared to autumn, and a 37% surge from summer. “The surge in demand for properties makes this spring a strategic time for investors looking to rebalance their portfolios by listing their properties on the market,” said Raine & Horne head of property management, Maria Milillo.
“Concurrently, a multitude of markets are still grappling with a shortage of property listings, which offers investors considering a sale during spring an exceptional chance to achieve decent sales results due to reduced competition.” Moore also observed that the current environment is good news for sellers, with more favourable conditions and rising home prices, compared to the second half of 2022.
“Home prices, nationally, posted the seventh consecutive month of growth in July and have recovered 2.8% since December. That means home prices nationally are now sitting just 1.4% below the March 2022 peak,” said Moore. “The Reserve Bank held the cash rate at 4.1% for the second consecutive month in July, and a stabilisation in interest rates looks to be within sight. Inflation appears to be heading back towards target at a pace consistent with what the RBA was expecting. As a result, markets are factoring in only a modest chance of further increases in interest rates.
“Further out, the fundamentals of housing demand remain strong. Unemployment remains extremely low by historic standards and has shown little sign of moving higher. Rental markets are extremely tight across much of the country amid strong demand and limited rental availability. International migration has also resumed, which will further add to housing demand.”
Spring will present a favourable opportunity for real estate investment in eastern Sydney, said Raine & Horne Green Square and Bexley/Beverly Hills head of property management, John Katergarakis. As the warmer months approach, Katergarakis anticipates a substantial reduction in vacancy rates for high-quality rental properties. He believes that this transition offers a prime opportunity for potential investors to enter the market. Particularly, he highlights the demand for two-bedroom, two-bathroom apartments valued at approximately $1 million, whether situated in Waterloo or Bexley.
“These types of apartments have gained popularity among professional couples who utilise the second bedroom as a home office, as well as among singles who opt to share rent,” said Katergarakis. “The presence of a second bathroom enables flat mates to have separate living arrangements, and these apartments also appeal to young families starting out.
“Furthermore, these premium apartments are currently being rented out for approximately $900 to $1,000 per week, translating to an impressive yield of almost 5%. Given interest rates are projected to fall in 2024, these popular properties are expected to become even more enticing options for investors this spring.”
