Australia’s Housing Paradox: Quicker Home Sales Amid Rising Interest Rates and Increased Property Listings

Despite a rise in property prices nationwide, homes in Australia are selling faster than in the pre-pandemic era, even with recent steep rises in interest rates, reports Caroline Riches. The fastest-selling homes are located in cities like Hobart, Melbourne, and Brisbane, with properties in Adelaide and Perth also quickly snapped up. Meanwhile, an increase in available properties on the market and interest rate hikes has led to properties taking longer to sell than in previous years.

In contrast, new data reveals that property listings are now 5.6% higher compared to the same time last year, though new listings fell 28.3% in April due to the long weekends for Easter and Anzac Day, as reported by Rowan Crosby.

According to PropTrack economist Angus Moore, this is attributed to the impact of the interest rate increases on buyer demand. “Market conditions are less competitive,” Moore said. “In March, there were around 8% more properties for sale around the country than in March 2022”. However, he noted that despite the drop in new listings, the total number of properties available has increased, providing buyers with more choice.

Properties in Adelaide and Perth are currently at peak prices, a contrast to the price dips experienced in Sydney, Melbourne, and Brisbane. Moore explains, “Adelaide and Perth have bucked the trend in many ways… the number of properties for sale in Perth is at historic lows.”

Moore also highlighted Hobart’s appeal due to its affordability, proximity to the east coast, and attractive lifestyle. “Even pre-pandemic, homes in Hobart were selling in 25 days, then in the pandemic they were selling in 10, which was extraordinarily quick.” Jasmine Rankin at Hobart Buyers Agents confirms the demand, stating, “We’re a little city that still represents exceptional value.”

On the other hand, Katherine Skinner, director of National Property Buyers in Adelaide, commented on the city’s low stock levels, suggesting that homeowners are not selling due to a lack of properties to buy. This has resulted in a competitive market with steady prices.

Perth and Adelaide are expected to remain popular with buyers in the coming year and likely outperform the larger capitals. Similarly, the volume of new listings is expected to remain subdued over the winter months2. Moore concludes, “That suggests we might continue to see the time it takes to sell a home get a little bit longer, but that’s also going to depend on what happens with buyers and to no small extent that’s going to depend on what happens to interest rates.”

Overall, Australia’s housing market appears to be in a period of stabilization, with a slight increase in property listings but longer selling times. As interest rates and market conditions continue to fluctuate, it remains to be seen how these factors will shape the property landscape in the months ahead.

References:

Where homes are selling fastest across Australia, Caroline Riches https://www.realestate.com.au/news/where-homes-are-selling-fastest-across-australia-2/ 

Australian housing market listings have risen 5.6% compared to last year, Rowan Crosby https://thepropertytribune.com.au/market-insights/listings-have-risen-56-compared-to-last-year/