The spring selling season has arrived but property experts aren’t expecting any recovery just yet, saying demand is expected to remain low while the number of properties expected to appear on the market will increase, leading prices to remain flat or fall through to the end of the year.
The predictions come as the market released another weekend of selling statistics in line with the past few months, with clearance rates still remaining under 60%.
APM economist Andrew Wilson says he expects to see figures below those recorded last year, explaining that buyer sentiment is coming off of a much lower base.
“We’ll see lower numbers to begin with in terms of properties auctioned. Numbers are still reasonably low, particularly in Sydney.”
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“The auction culture has been tested a little bit as well,” he says. “We’re still seeing sales happen, but post auction, which is quite interesting. That’s not an absolute indicator, but it does reflect fewer buyers, less competition and so on.”
Wilson says with the New South Wales budget to be released, reports indicate that the property market could be dealt a positive hand. However, he also says the performance over the next three months will largely be in line with sentiment for the economy in general.
“It’s been a winter of discontent. The uncertainty is just coming through, particularly at the top end where it is quiet.”
“Over the next few months it’s just going to be more of the same. I think we’re going to have a better sense of the market by the end of spring.”
SQM Research managing director Louis Christopher agrees that we may see further house price falls, “depending on where you are”.
“It’s going to be a very soft market around the country, and that’s what we can expect.”
“The market is saying to us that even at current rates, it cannot handle the situation. Buyers are reluctant, and rates are just a little too high for the market to bear. It’s definitely a weaker market right now.”
According to the Real Estate Institute of Victoria, the state recorded a clearance rate of just 57%, compared to 70% during the same weekend last year. Chief executive Enzo Raimondo said in a statement that “conditions look certain to continue to favour buyers over the next few months”.
In Sydney, the city recorded a clearance rate of 54.8%, followed by Adelaide and Brisbane with rates of 30.4% and 21.1% respectively.
However, some indicators suggest that first home buyers are still keen on owning a home. According to a new survey commissioned by ST George, 70% of 1,000 respondents aged between 25 to 34 said they expect to purchase a property within the next five years.