Buyers still hold the balance of power when it comes to buying homes according to the May quarter update to the Commonwealth Bank-RP Data Home Buyer’s Index (HBI) with Sydney still rated as a buyers market while Melbourne is rated as balanced.
While conditions favour buyers, the latest index shows a modest improvement over the past quarter as the volume of stock available has eased. The index sits just below 100 – indicating a balanced market – having dipped in favour of buyers since the start of the year.
Queensland and Tasmania are rated as extreme buyers’ markets – as they rated in the February index – with conditions “well and truly skewed towards the buyer”.
Brisbane is a more balanced market than its corresponding state market, rated one notch down as a buyers’ market.
However, Hobart matches Tasmania as an extreme buyers’ market – the only combined state and capital city market to be heavily skewed in favour of buyers.
No state or capital city market is rated as a sellers’ market, with Victoria the only state market where conditions have improved in favour of sellers – going from a buyers’ market to a balanced market, matching Melbourne, which is also rated a buyers’ market.
The other balanced markets are Canberra and the ACT with Sydney, Adelaide and Perth rated as buyers’ markets.
Darwin is the only capital city where conditions have improved in favour or sellers – also going from a going from a buyers’ market to a balanced market.
The report notes that total advertised stock levels continue to outweigh the number of home loans funded, “suggesting buyers should have a reasonable amount of leverage when it comes to negotiating on the purchase of a home”.
While Queensland and Tasmania market conditions well and truly favour buyers, “at the other end of the spectrum Victoria and the Australian Capital Territory are experiencing more balanced market conditions with vendors and buyers relatively evenly matched”.
“At a capital city level conditions typically indicate that the market is in favour of the buyer. Again, Melbourne and Canberra are the outliers along with Darwin, with conditions proving to be balanced.”
Commentary on the state capital city markets is:
- Sydney (Buyer’s market): Sydney’s selling conditions have improved slightly over the last quarter, however buyers remain better positioned in negotiations than vendors. Given these conditions vendors will likely have to set more competitive prices in order to attract purchaser interest.
- Melbourne (Balanced market): Market conditions across Melbourne are relatively balanced with the number of homes available for sale broadly in line with buyer demand over the past quarter. Conditions still slightly favour buyers rather than sellers and vendors will need to keep this in mind when trying to sell their home.
- Brisbane (Buyer’s market): The ratio of supply to demand in Brisbane has not changed over the quarter with conditions continuing to favour buyers, with the amount of housing supply outstripping the number of buyers that are active in the current market. Buyers remain in a strong negotiation position and vendors will need to be realistic about their price expectations.
- Adelaide (Buyer’s market): Housing market conditions across Adelaide continue to favour buyers rather than sellers, however there has been a noticeable improvement in selling conditions over the past quarter. Those people looking to buy homes in Adelaide hold a slightly superior position in negotiations to those looking to sell in the current market.
- Perth (Buyer’s market): Prospective home buyers in Perth remain in the driver’s seat, with the number of homes for sale still outweighing effective demand. The Index suggests that buyers are enjoying a stronger position when it comes to settling on the purchase price, however conditions for sellers have shown modest improvement over the past quarter. Sellers will still need to be realistic in their price expectations in order to make a sale.
- Hobart (Extreme Buyer’s market): The index for Hobart shows market conditions remain well and truly in favour of the buyer and have shown only a slight improvement over the past quarter. These conditions suggest increased scope for price negotiation in the current market. Effective supply is continuing to outweigh effective demand which is likely to result in a superior negotiation position for buyers.
- Darwin (Balanced market): Conditions across the Darwin housing market have improved in favour of the seller over the last quarter and now show a market that is reasonably balanced. Should vendors hope to successfully sell their property they will still need to set their price appropriate to the current market in order to attract buyer interest.
- Canberra (Balanced market): Across Canberra, buyer demand and the supply of housing available for sale is relatively evenly balanced with conditions slightly favouring the seller. Over the past quarter there has been very little change in selling conditions. The current HBI reading shows a balanced market with buyers and sellers evenly matched.
This article first appeared on Property Observer.