We’ve finally made it to spring! If history tells us anything, as the seasons change, so does the property and lending landscape.
According to Grace Taylor from Taylor Mortgages, home loan activity has fallen but remains well above long-term averages.
Grace explains “There are still a lot of active buyers in the property market, judging by the latest home loans data from the Australian Bureau of Statistics. Borrowers signed up for $28.4 billion of new home loans in July, which is 11.3% lower than the previous year but 47.3% higher than the average over the previous 15 years. So, while condition are much more buyer-friendly than they were during the recent property boom, there’s still quite a bit of buyer competition, especially for quality homes.
Real estate guru Tom Panos believes we’re “close to the bottom”.
The real estate coach and trainer shared his thoughts on the current spring-time property market conditions recently when speaking on an episode of Real Estate Exposed.
Based on conversations he is having with local agents across Sydney and Melbourne, he highlights that the clearance rate has gone up after hitting “rock bottom” across July and August, also pointing to the fact that Brisbane’s correction has hit, while Adelaide’s has “only just begun”.
In spite of the situation that’s playing out in the United States where inflation is “out of control”, Tom doesn’t expect this to continue, with corrections having led to price falls of 15 to 20 per cent this year alone in some markets.
What Mr Panos is now seeing “is that there’s a bunch of buyers that are thinking to themselves, ‘You know what? We might only have a few months before there are people back in there again – this is good buying’.” If that is the case, and the market is already bottoming out, it begs the question of “how long will it stay bottomed out?”
According to Tom, “It’s a billion-dollar question which affects the behaviour of so many people that want to buy real estate at the moment. The number one fear that buyers have is not fear of missing out like previously, but fear of overpaying.”
Mr Panos explained that buyers are now in the paranoid stage, “They’re paranoid that they’ve worked really hard to save a deposit and they’re going to buy a property for $900,000 and it’s going to be worth $800,000. That’s the fear that people have.”
To counter that, he professed that buyers need to be aware that there’s another fear they should be mindful of, missing the window of opportunity to buy at a really good price.
“It wasn’t in March. It wasn’t in May. It may be right now, from what I can see. You might have another six months maybe,” Mr Panos said.
Even then, the return to capital growth could come even sooner, with Mr Panos pointing to discourse around the idea that “the Reserve Bank doesn’t want Australians to feel poor at Christmas”. “Their narrative may change. They don’t want to have Australians sitting in their house traumatised with fear, not spending money over Christmas.”
The Redlands property market is very resilient. We certainly aren’t seeing buyers offering up to $100,000 over the listed price anymore, we are back to a mixed bag of offers coming in on properties. Some offers are still above the listed price whereas, we are now seeing offers coming in below the listed price again, something that was completely unheard of during the Covid rush to buy!
Remember, if you need any help or advice, we are just a phone call away.
All the best, Simon.
Source: Grace Taylor, Taylor Mortgages / Grace Ormsby, REB