Buyer interest in $1m properties soars
The low cost of debt and high household savings are enabling Australians to buy more expensive properties, new research ...
Australia’s booming property market is showing early signs of cooling as buyer enquiries drop with the conclusion of the HomeBuilder stimulus, new research has revealed.
Stats released by REA Insights showed that rapidly rising prices and the end of government benefits are seeing buyers fade from the market, despite the RBA all but confirming rates will stay low until 2024.
The report is based on analysis of consumer behaviour in real time by extracting property market insights from users who visit realestate.com.au each month.
Key metrics used for the analysis include search activity, email enquiry, views per listing, weekly sales of properties listed for sale on realestate.com.au, days on site of properties sold, filtered searches by price and by bedroom, and developer enquiry.
According to REA’s director of economic research, Cameron Kusher, the market is showing its first signs of cooling.
“While the Australian housing market remains undoubtedly strong, there are some signs that some of the heat has come out of the market,” he said.
A lift in sales volumes has tempered searches, although they remain historically high, the report said.
The overall volume of visitors to the website searching for properties for sale has increased by 46.3 per cent compared with a year ago, with all states and territories mirroring this trend.
The analysis also found that the volume of email enquiry to residential real estate agents fell for the third successive month in April 2021.
It said: “With sales volumes strong, search volumes easing back over the past month and HomeBuilder having ended, it wouldn’t be a surprise to see a further decline in email enquiry over the coming months given that many prospective buyers have now purchased and there are seemingly fewer buyers in the next wave, and housing costs are becoming more expensive as prices rise.”
The economist pointed out that while low borrowing will remain a strong driving force for future buyers, affordability could act as an anchor for future price growth.
“While low borrowing costs remain a strong lure for buyers in this market, an increasing number of buyers have now purchased, incentives have been removed from the market and price increases mean that housing has become less affordable,” Mr Kusher continued.
However, despite showing signs of cooling, it is unlikely that the boom is completely over.
“We don’t expect the market to come to a grinding halt; prices are expected to keep rising, but we expect that the second half of this year will not see the market quite as strong as it has been over the first half,” Mr Kusher concluded.