Selling this spring? Property professionals weigh in
Despite continuing pressure on owners and investors, real estate players urge cautious optimism.
Recent analysis by national real estate platform LocalAgentFinder has revealed that while mortgage stress continues to burden property owners, the spring selling period may bring about some much-needed growth.
Richard Stevens, CEO of LocalAgentFinder, believes that there is a “tangible energy” in the Australian housing market that savvy investors can harness, observing that the coming months provide sellers “with a great opportunity to realise significant capital gains with the right selling strategy in place”.
The Reserve Bank of Australia’s recent decision to cap interest rates at 4.1 per cent for a third month comes as welcome news to property owners. According to data from CoreLogic, the interest freeze has sparked a remarkable upsurge in home values, with the think tank registering an increase of 1.15 per cent to 1.5 per cent over August.
This growth is a trend across all major cities, most notably in Brisbane, where CoreLogic’s data has revealed an astonishing 6.2 per cent rise in home values.
Mr Stevens noted: “The interplay between rising home values and the increase in listings, even outside the customary selling seasons, points to a unique dynamism in the market. For every 1 per cent uptick in home values, we see around a 0.5 per cent growth in new listings.”
With “unique dynamism” at play, it’s important that investors remain strategic. Interest rates may be on hold, but Mr Stevens warned that this may grant only “a temporary reprieve”.
Sydney realtor Kevin Dearlove of Stone Real Estate Beecroft expanded on this, observing: “While rents have surged, the interest rate hikes have significantly offset these gains, eroding the potential rental yields.”
This erosion, Mr Dearlove stressed, “is urging property owners to reassess their portfolios, particularly in the residential apartment sector” and compelling investors “to take a more holistic view”.
Mr Stevens reminded investors that the RBA’s interest freeze, while encouraging, is not the only factor investors should take into consideration when deciding to sell.
He noted that “interest rates are just one part of a complex financial ecosystem”.
“Multiple dynamics are at play here, including housing supply, foreign investment, and changing population demographics. For potential investors or home buyers, these all need to be considered in tandem with interest rates for a well-rounded investment strategy.”
Mr Stevens expects the coming months will bring continued financial pressure. Cost of living and concerns about property affordability continue to burden Australians, and stakeholders should take these pressures into account.
“It’s not just about selling; it’s about selling smart,” he concluded.