An early Easter ignited the market in March as sellers looked to beat the forthcoming holiday period. We were waiting to see what impact an increase of property would have on the strength of the market and to be fair the results were mixed. We are continuing to see excellent strength for properties priced around $1m and for genuine family homes at any price point. Where the market becomes more uncertain is with those homes that may not appeal to the broader market be it through a slightly unusual floor plan, smaller land area, busier street or a very high-end renovation. It appears that where there are few comparable transactions buyers seem happy to stand back and wait for someone else to make the first offer.

 

Through the latter part of February and into March media outlets bombarded us with stories on the hot property market, however our experience suggests that when this starts to occur the market trend has most likely already shifted. On the ground we are seeing evidence of the market cooling just a little, which could potentially be the result of a number of factors. Heavy media publicity promoting the strength of the market can actually work as a deterrent for many buyers who want to avoid purchasing at the peak of the market. We may also be starting to feel the effects of rising interest rates and the abolition of the First Home Owners Grant boost seems to have eased the aggressive bidding we experienced from this sector of the market throughout last year. An interesting market barometer to watch is home loan approvals which continue to decline each month, with the latest January data showing a much larger than anticipated reduction of 8% in mortgage approvals which was the sharpest fall in seven years. We are still experiencing a strong pool of buyers inspecting most open homes but over the next six months data suggests that fewer ‘ready to act’ buyers will be entering the market.

 

Selling conditions remain buoyant but if there was a peak, we’d suggest that it may have passed and the market has now found steady ground. We are entering a period when sellers need to be accurate with their anticipated price to secure a sale in a favourable timeframe. The market reaction to a new listing remains instantaneous with all the best buyers inspecting within the first couple of weeks of marketing. This period in the sale remains the most important as there is not an infinite pool of motivated purchasers entering the market each week. There is also little point selling if your motivation is simply to cash in on the ‘hot’ market as an overly optimistic price will appear very different from a buyer’s perspective. While some of the frenzy has dissipated over the past month, activity remains positive and a level playing field for buyers and sellers makes for good trading conditions.