April Overview - Market disruption in April, sets up an active May

April was somewhat of a chaotic month for the property market. Early in the year we identified that it would be the case, with school holidays overlapping with Easter which then rolled into Anzac Day. However, adding the Federal election to the weekend of May 3 has forced a very large portion of the property sector to take a breather. Fewer new listings came to market during April and the auction clearance rate fell to a four-month low as buyers paused and shelved plans to make major financial decisions.

Both agents and vendors continued to push hard to run their campaigns through the disrupted period and while there was a trickle of transactions, the overall market largely stalled in April. In some ways we feel that the market almost required this reset, as buyers had become overly cautious with not only a holiday break but the uncertainty of an election outcome and a shifting share market. There is growing hope that pushing through this disrupted period coupled with a predicted May rate cut will provide a clearer runway and a more positive platform for buyers to transact.

While April was a subdued month, our team sold a large volume of property so there was still plenty of activity to observe. We noted that properties priced up to $3m tracked quite well and traded with an average of just 12 days on market. It was the more prestige priced homes that had buyers back on their heels and closely dissecting a property of interest before making a decision, with anything north of $4m taking 32 days to trade. It’s a noticeable difference and reinforces the sentiment that we require a rate cut to underpin buyer confidence. In fact, the ideal scenario for market recovery would be for the global economic outlook to stabilise and rates to be cut at least three times. This would generate a very different landscape to the conditions currently in play, which are causing somewhat of a stalemate between sellers’ expectations and buyers’ willingness to make an offer.

If there was ever a market where you could see the role ‘sentiment’ plays, it’s this very environment. A few disrupted weekends, an election and an uncertain economy form the perfect storm that almost freezes people from making a decision. However, it’s actually a period when a buyer should be alert, engaged and making a move but alas, it’s evident that most prefer the strategy of seeing competitive tension and safety in what so many others are doing. It’s an odd investment tactic as when purchasing just about anything else, we wait for discounts, but when it comes to property only the brave take advantage of a cooler market. Let’s see what May brings, as things could turn around quickly!