Two-month window over Christmas for Aussies to score a ‘property bargain’ By Natalie Brown
There could be a window of opportunity for Aussie homebuyers to score a “property bargain” in the next two months, according to one group of experts.
Australian homebuyers could see a two-month window of opportunity to score a “property bargain” over Christmas, the national marketplace for buyer’s agent services has said.
But this could be their last chance before international border re-openings see an influx of overseas buyers in the mix.
BuyersBuyers co-founder Pete Wargent said the holiday period is commonly a time when buyers “lose a bit of interest … as thoughts turn to summer holidays or more festive pursuits than kicking off with a property search”.
“But with new listings rising, some buyers are sensing a window of opportunity to buy ahead of the international borders reopening in 2022, especially in Sydney and Melbourne,” he said.
“There’s a brief period of time before record low overseas arrivals numbers are replaced by a new wave of arrivals,” BuyersBuyers CEO Doron Peleg said, adding that the housing market this year has been characterised by “exceptionally low stock levels”, though that’s set to change.
“The permanent immigration cap may even be lifted to above 200,000 in due course to alleviate Australia’s skills shortage. Logically, buyers should have less competition and potentially more choice before international travel picks up again in earnest.”
Omicron, the new Covid variant of concern, could also help to swing the property market back to a buyer’s market and drive down prices, with homeowners scrambling to list their properties before the boom ends.
Australian house prices grew by 1.3 per cent in November, according to CoreLogic, taking national housing values 22.2 per cent higher over the past 12 months and adding approximately $126,700 to the median value of an Australian home.
But there are signs the market is starting to cool.
Not only have auction clearance rates started to tumble since October, but there’s also been a tightening of lending rules, while Omicron is bringing fresh fears of new restrictions, which could cause some shockwaves in the market, particularly in major cities.
“Anything that pushes out a pick-up in immigration will hit the Sydney and Melbourne markets – the apartment market in those cities is dependent on a recovery in immigration numbers,” Louis Christopher, managing director of SQM Research, told The Australian.
But a surge in auctions from sellers who waited too long to take advantage of the soaring prices has increased the amount of housing stock available and seen the clearance rate drop to 71.4 per cent for the week of November 29 – down from 74.5 per cent in the week prior, according to CoreLogic.
With more stock and less competition between buyers, one in 20 auctions in Sydney were pulled before the weekend.
“It’s too early to tell if the softening clearance rate is going to extend further. If we see these sorts of big listing volumes continuing to hit the market into February, we will know the slowdown has arrived,” Mr Christopher said.
Mr Wargent said property buyers should take a medium or longer-term focus when it comes to prices.
“Until relatively recently, the idea of monthly or daily housing price reporting was relatively obscure for most people. However, it’s important to remember that due to the transaction costs, property tends to work best if you plan to hold the asset over a reasonable time horizon,” he said.
“As we have seen over the past 18 months, even the experts have been unable to predict market movements with any meaningful level of accuracy.”
He advised buyers not to “become too focused on small price movements since they tend to be relatively immaterial over a decade”.
“Try instead to think about where prices will be 10 years from now. December and January can be an exciting time to buy property, with less competition,” he said.
“Immigration has been high in Australia for the past 15 years, and will be again relatively soon. But for a brief time, there may be an opportunity to snare a bargain purchase.”
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