Sellers Flock Back to Property Market as Interest Rate Uncertainties Ease

In recent times, the property market has observed a surge of sellers returning, fueled by indications that interest rates might have peaked or are nearing their summit. This resurgence in seller activity reflects a growing sense of confidence and optimism in the market.

A recent survey conducted by realestate.com.au discovered that market ambiguity was a prime factor deterring sellers. Many were wary of listing their properties due to uncertain trajectories of interest rates, coupled with the challenge of finding a new property to move into. However, with clearer perspectives about interest rates now, sellers are displaying increased enthusiasm to enter the market.

Cameron Kusher, REA Group’s director of economic research, reflected on this dynamic: “The feedback we’ve been getting from real estate agents this year is they’ve been encouraging people to bring properties to the market because prices have started to rise, sales volumes have been stronger,”

Furthermore, recent PropTrack data has indicated a remarkable surge in new property listings in Sydney and Melbourne for the month of July. This rise is uncharacteristic for this time of year, based on the trends over the past decade

Greg Allen from LJ Hooker attributes this trend largely to the wavering uncertainty around interest rates. “I think they really now can take a good hard assessment of what the short term, medium term plans for their family is,” he mentioned, emphasizing that clearer information enables homeowners to strategize their decisions for the foreseeable future

This sentiment is echoed by buyer’s agent Kate Hill from Adviseable, who believes that if the Reserve Bank of Australia (RBA) continues its stance on interest rates in the upcoming months, this could result in even more property listings. “If [the RBA] leaves interest rates on hold again in early September, then I think there will definitely be more listings coming on… because people will have that confidence that they can afford it and it’s all settled down a bit,” Hill remarked

While sellers are gradually regaining confidence, other notable transactions in the Australian property market also highlight its vibrancy. For instance, in a significant deal, Stadia Capital acquired a 14-storey office tower at 333 Adelaide Street in Brisbane’s CBD for $41.75 million

Mike Walsh of Cushman & Wakefield, who was involved in the sale, emphasized the tower’s stability: “The tower’s income is underpinned by a 12-year lease to Australian Moreton Education and is further reinforced by a diverse occupancy mix. This tenancy mix ensures stability and a strong foundation for sustained growth,”

To sum it up, the Australian property market is showing signs of rebounding and revitalizing. As interest rates plateau and clarity prevails, the upcoming months might showcase an even more robust seller market. However, as with any market prediction, it remains essential to tread with caution and be well-informed.

References:

“Sellers rushing back on signs interest rates have peaked” by Lisa Calautti. ↩  https://www.realestate.com.au/news/sellers-rushing-back-on-signs-interest-rates-have-peaked/ 

“Australian property market wrap: 25 August 2023” by Henry Thai. ↩  https://thepropertytribune.com.au/commercial-real-estate/australian-property-market-wrap-25-august-2023/