Demand for properties for sale remains heightened and above the supply of properties for sale. The recent lift in new listings should go some way to allow more of these buyers to find a home.
The next question will be, how large is the next wave of buyers? Realestate.com.au’s PropTrack Cameron Kusher believes the next wave is likely to be big, but not as large as the current one. Resulting in a more batter supply and demand balance.
The removal of Covid restrictions means that buyers may be less likely to dedicate as much of their income to housing. Potential buyers in fact may decide that their current home is sufficient. While there has been no movement in variable mortgage rates – they’ve fallen if anything – the lift in fixed-rate mortgages signals rates will increase and borrowers don’t have the security of locking in low rates for several years.
Changes by the Australian Prudential Regulation Authority around credit availability has been mild to date, however, they are now constricting credit availability and lessening borrowing capacities.
In turn, this will likely contribute to a slowing of demand for housing and means that prices can’t be bid-up as rapidly as they have been over the past year.
Slowing of overall demand for housing is likely to lead to a better balance between the supply of homes for sale and the demand for them.
This is expected to lead to a slower rate of price growth over the coming year. It is also expected to result in properties starting to take longer to sell, as potential buyers have more choice and less competition, meaning they don’t have to move as quickly to secure a property and may not have to pay as much of a premium.
View the entire report here.