Reading the tea leaves – Spring market insights

As we turn a corner into August, our team is already busy plotting and planning sales campaigns that extend well into September and October. Our internal analysis reveals that we are set to have an explosive start to the Spring selling cycle with a wave of potential sellers already on the front foot to hit the market in late August.

It’s hard to pinpoint a single reason behind the increased drive to sell this Spring, with the extended higher interest rate environment perhaps playing a role. After all, it was only a matter of months ago that our financial experts and major banks were spruiking that up to three rate cuts would occur this year, which has been replaced with the prospect of rates being increased. Given the latest data around stubbornly high inflation in Australia, it appears that most in the property sector are resigned to the fact that the potential for cash rate cuts in 2024 has evaporated. As a result, most would happily take an RBA decision to leave the cash rate on hold for the balance of the year.

Reviewing the auction market is important as it is the live tracker that reflects market confidence and sentiment, much like tracking stocks on the ASX. SQM Research has Sydney’s clearance rate regularly posting below 50 per cent, which reflects a jittery and nervy market. As we move towards Spring, it’s fair to say that all eyes will be on the RBA meeting in August, which could be quite telling as to how the Spring market launches. If the RBA decides there is enough weaker economic data around to leave the cash rate on hold, that would be seen as a positive, while a cash rate increase would be a blow to buyer confidence.

Layering this information with supply versus buyer demand will be the other critical metric to monitor. We’re expecting to see the forerunners of new listings start in mid-August as some well-organised sellers look to get a jump on the Spring market. However, what we won’t know is just how many people across our regions are taking the same approach. Currently, the market is well balanced between supply and demand, which is ensuring that every well-priced seller can expect to attract a few buyers into negotiations. However, if we see even a 10 per cent jump in listing volumes, this will dilute the buyer pool or we’ll need to see an equivalent jump in the number of active buyers willing to purchase.

This Spring market is already looking dynamic and we’re excited about what lies ahead. A more challenging economic environment suits our experienced agents and the suite of tools we’ve developed over decades of operation. We expect to see some seriously good-quality real estate enter the market and no matter what’s happening with rates, quality properties always generate excitement. Let’s just hope the RBA can keep a steady hand.