2022: Last Quarter Market Update

2022: Last Quarter Market Update
2022 has absolutely flown by, and while it’s a scary thought, we are only about 90 days away from the end of the year. This year has been one categorised by pressure stemming from rising inflation, onto interest rates, resulting in a general decline in property prices across the market in Sydney.

While this has been going on however, good quality property in the Eastern Suburbs is generally holding it’s ground, with strong results still being seen for particular products.

Apartments, and properties requiring renovation seem to have been hit the hardest by price falls, while prestige and newly renovated stock in good locations is the most resilient.

As we move into the final quarter of the year, buyers who are wanting to get into the market and be in their new home before Christmas need to be aware that the window is well and truly closing, with only four or so weeks remaining to really start your search in ernest.

Below is a few key points for buyers to take into consideration when making property plans for the end of the year:

Campaign Timelines & Key Dates:

• Spring School Holidays run from the 26th September until 7th October in NSW. This will be a quieter period for new stock being launched to market.
• Following the end of the School Holidays, buyers can expect new stock to be launched to market, with 4 or 6 week auction campaigns. This should see most properties trading in mid – late November.
• Following on from this, buyers should expect that there will be a significant reduction in available stock as vendors and agents prepare for the Summer Holiday period.
• Most new listings from November onwards will be held over until early 2023 (usually launched around Australia Day).
• Many of these properties are likely to be shown “off market” during late November & early December.

Renovation Boom:

• Australia’s pandemic-fuelled renovation boom has run its course, with economists tipping higher interest rates, falling property prices and fewer sales will weigh on growth and cause a blowout in stretched state government budgets.
• IFM Investors chief economist Alex Joiner said renovation spending was set to fall further thanks to soaring costs and the end of government subsidies.

Interest Rates/ Distressed Selling:

• The most aggressive rate hiking cycle in almost three decades is set to continue, after the Reserve Bank board raised rates for a fifth consecutive month and stuck by its commitment to take more action to cool Australia’s overheated economy. As was widely expected, the Reserve Bank board lifted the cash rate target by 50 basis points to 2.35 per cent at its meeting on in September.
• The cash rate is now at its highest level since December 2014 and poised to increase further as the central bank seeks to tame soaring inflation, which is tipped to hit 7.8 per cent by the end of the year.
• Australia’s housing market is showing no sign of distress even as the benchmark lending rate rises to a seven-year high, with the number of homes on the market falling in August and September, indicating owners are not yet under pressure to sell in a falling market.

Market Sentiment:

• Stock levels are extremely low at present with many vendors choosing to ‘ride out the storm’. This is shielding some segments of the market from expected price drops, as buyers are forced to compete for less stock.
• Costs associated with listing and selling properties in present conditions are seeing many vendors preferring to wait or list property “off market”.

Are you looking to buy, before the end of the year? Click below to book a complimentary strategy call.