Issue 9 | Friday 5 May 2023 | Andrew Bell’s Market Wrap: Changing Sentiment and Increased Auction Success Rates
The real estate market in Australia has been experiencing varying outcomes across different regions, but now there are signs of a changing concept. The past year has been dominated by discussions of rising interest rates in virtually every country, all due to growing inflation. However, the interest rate rises have been too hard and fast, and not allowing for the flow-on effects that occur in real estate cycles. The Reserve Bank of Australia has been holding to the premise that until inflation was brought under control, they were going to continue raising rates. Although they paused an increase at the last meeting, the Governor warned there were more rate rises to come.
The Consumer Price Index (CPI) figure, or inflationary figure, in the US has been declining rapidly, indicating that inflation has spiked and is on its way down. This has led to discussions about interest rates, with many economists suggesting that there is room for some easing shortly. Buyers are returning to the marketplace in ever-increasing numbers, believing that interest rates have actually peaked or will only experience one more rise before a downward movement.
The market has quickly responded to this changing sentiment, with an increasing number of sellers choosing to sell via auction. Across the capital cities, there were 1780 properties to go under the hammer, with Ray White capturing 30% of those auctions and 75% of them selling under the hammer. The success rate in Melbourne was even higher at 85%. The number of attendees at open homes has also significantly increased.
However, the number of properties coming to the market continues to decline, leading to even lower stock levels. Most of the properties that do come to the market are genuine sellers who are committed to selling at a market price, leading to a higher success rate. This situation is exacerbated by the falling construction levels of new properties meeting unprecedented demand, not only from those who reside in Australia already but from an ever-increasing number of migrants coming to fill the labor needs in business.
Despite discussions of more challenging economic conditions in Australia, there is no reason to believe that there will be any significant downward pressure in the real estate market. Everyone needs a roof over their head, and with an acute shortage of available properties to buy, there is high demand for real estate.
On a final note, the Ray White Muscular Dystrophy ball is coming up, and bookings are already flowing in. This is regarded as the most fun ball of the year and is an iconic event on the Gold Coast. To book or for more information CLICK HERE, don’t miss out on this fantastic event on Saturday, September 2.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group
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