Early market movement delivers a mixed response

Welcome back folks to another round of monthly property news. What a year we have shaping up! As the market starts to fire up after the holiday slumber, buyers, sellers, mortgage brokers and agents are waiting in anticipation to best gauge overall sentiment. What we do know is that inflation remains at a record high, in fact the last time Australia had inflation at near 8% the cash rate was at 15%. This latest inflation data has only further added pressure on the RBA to lift rates in their first February meeting and probably again in March. Financial commentators appear to be aligned that the cash rate will pause at 3.6% however as usual there are a few alarmists suggesting the RBA should lift 40 basis points in February.

Our early indicators are promising, with plenty of enquiry across a range of price points and strong turnouts at open homes. We’ve detected that many buyers are happy to look around and assess the market before making immediate offers, which is standard behaviour at the start of the year. We’ve certainly seen buyers displaying signs of sensitivity regarding properties that may be perceived as being excessively priced. This behaviour is worth reflecting on as it signals the mood of the buyer pool and indicates where the market may be trending to start the year. In our experience, what we have seen so far this year would suggest that property prices are overall still trending lower. There will be nuances as always with certain properties attracting strong competition while others languish. That said, the theme of the market is one of caution and the lessons from this are most important to those looking to sell, with accurate pricing required when bringing properties to market.

While only a few properties traded in January, we’re anticipating far more activity through February when we have the first wave of auctions and more property entering the market weekly. Although buyers may be cautious, we can see that many are focused and keen to secure a new property. These conditions are absolutely fine whether you’re looking to buy or sell. The most challenging thing for anyone moving through the market is to actually watch what’s happening in the area you’re considering rather than get too caught up in the media noise. As we continually report, the predictions over the past few years and the reliability of information from some of our largest institutions have been nothing short of appalling, so it would be wise not to base your timing on media headlines.