What will the spring property market bring this year?
What will the spring property market bring this year? Will it be the same hot real estate period that the majority of spring seasons bring to the property market? Or will lingering COVID ups and downs, to say nothing of recent interest rate spikes, result in a spring such as we've rarely experienced before this year?
Why is spring such a popular time to buy and sell?
One main reason: nice weather with more sunshine and longer days (even if you don't live in a daylight saving state).
As the sun shines more, and for longer, we have extra time to search for our dream home, while strolling down the street to do so holds more appeal than it would on a chilly, wet winter day.
As well, homes and their gardens look far more attractive in the sunshine while moving house is certainly easier in warmer, sunnier weather.
This is especially the case in four (not two)-seasons-in-a-year in places such as Sydney, Melbourne and Hobart.
Data tends to back up a swifter spring property market as well.
A recent report released in June last year, and based on data from 2015-2021, showed national November property sales achieved the highest average prices of any month - almost 6% higher than that of January, the statistically cheapest sales month.
Finally, spring is also a great time to buy, sell and get settled in a new lifestyle before the festive season begins.
First (relatively) COVID-free spring in three years
Last spring saw us very slowly recovering from the lockdown and border closure chains of COVID.
As a result, industry experts forecast with bated breath just how the traditionally busy spring property market would pan out.
And we can thank a "lopsided supply and demand ratio" during winter 2021 for an astonishing surge of new listings and amazing sales in spring - even if the usually popular season arrived later than usual for the property market.
PropertyUpdate's Michael Yardney commented that new property listings hit 22.8% in the last three months of 2021 - after dropping to "historic lows" in June.
"This made for a robust spring selling season with new listings finishing 19.2% higher than the five-year average," he said.
"In November, property transactions were 32.6% above the decade annual average (and) the first weekend in December saw a record number of properties taken to auction, which resulted in a record dollar value of properties transacted."
According to Mr Yardney, this highly positive ending to the year followed the fastest level of price growth in more than three decades, or in real terms, the third fastest in a century.
But that was then - this is now!
Will the spring property market in 2022 differ from other spring property seasons?
From our research, it's unlikely we'll see the extraordinary figures we enjoyed in the spring and summer of 2021.
But that definitely doesn't mean prices and listings are "plummeting" nor is the property market crashing.
Our research suggests that this spring will see both listings and sales return to largely pre-pandemic levels - but with some changes to keep in mind.
What CoreLogic says:
A CoreLogic report late last month suggested that so far, new listing trends across the country were "generally following ‘normal’ seasonal patterns (with) the flow of new listings in line with last year and showing little divergence from the pre-COVID average at the macro level".
While new listings figures have dropped since late March, CoreLogic doesn't believe this is a major concern with these figures holding "relatively firm".
At the same time, this firm trend was due to a slower rate of absorption, or less buyer demand, thanks mainly to higher interest rates and low confidence.
This decreasing demand could see the traditional rise of spring and summer listings "test the market"; however, CoreLogic remarks that listings are "remarkably diverse" in both capital cities and regional markets.
Higher supply levels could also be great for spring buyers, adding pressure to already very high prices, which could, in turn, motivate vendors to lower their pricing expectations.
What SQM Research says:
Buyers beware though, says SQM Research, as on the back of these potentially higher supply levels may well come strong competition from keen - not less-confident - buyers.
While CoreLogic says there's been no evidence of panicked selling or rises in "distressed" stock, SQM Research managing director, Louis Christopher, doesn't agree.
In a recent article in The Financial Review, Mr Christopher noted this spring would be a very tough one for sellers as older, distressed stock on the market built up amidst falling buyer demand.
According to SQM Research data, national property listings that have sat on the market for more than six months increased 1.6% in June, while new listings falling 5.4%,
“Spring will be the weakest point in the market and vendors who want to sell are probably in a better position to enter the market now because prices will continue to fall,” Mr Christopher said.
What Michael Yardney, PropertyUpdate, says:
In a report published on August 15, Mr Yardney described spring as "the next big test" for the property market, especially as interest rate rises are expected to continue.
"Our property markets are feeling the winter chills and the downtrend in our property markets continues as buyer and seller confidence wanes," he said.
However, while buyer demand is apparently low, Mr Yardney said auction clearance rates had risen for the third week in a row, despite more properties being offered for sale - which could be the early signs that the market is "looking for a bottom".
On August 22, CoreLogic also reported weekly preliminary auction clearance rates in our combined capital cities passed 60% for the first time since June, Mr Yardney said.
Auction activity also increased for the second consecutive week.
"It seems that buyers are seeing value in the market and are not prepared to wait to see if prices fall further," Mr Yardney said.
What Terry Ryder, Hotspotting says:
Mr Ryder is confident that while some markets have slowed down this year, few are actually in decline, despite many dire headlines suggesting the opposite.
In fact, only Sydney and regional NSW markets have "dropped noticeably", and this after a "buoyant" period for markets in spring 2021 amid a year of very major price growth, Mr Ryder said.
Mr Ryder added that buyer activity also continues to be strong in most major markets, notably Adelaide, Perth, Darwin, Canberra, Melbourne's cheaper suburbs, and regional areas in Victoria, Queensland, South Australia and Western Australia.
"Elsewhere (than Sydney and regional NSW), the capital city and regional markets will be busy this spring and there is even some evidence that the corrections in Sydney and Melbourne have bottomed out," Mr Ryder said.
"As well, the latest ANZ Roy Morgan survey of consumer confidence suggests sentiment is rising, with the economy strong and unemployment low."
As for new listings, Mr Ryder said he concurred with recent PropTrack data, as well as the Ray White Group, that suggests current listings are similar to the same time last year.
He also agrees with CoreLogic's reports on increased auction clearance rates, and this despite rising numbers of properties being put up for auction.
