Autumn is traditionally a steady, solid time for the Australian property market, but this year the seasonal shift between hectic summer and quiet winter has been impacted by broader economic changes.
Sentiment, values and lending all lifted through the past months, according to NAB Executive for Home Lending Denton Pugh, who suggests that even before interest rates were cut in February, speculation had prompted a response in the housing market.
Nationally, property values rose 0.4 per cent in March, setting a new national record by the end of the quarter. Darwin and Adelaide led the increase, followed by Melbourne and Brisbane. After months of patchy growth and flat conditions, this marked a bit of a turning point.
“We’ve seen this momentum reflected in buyer behaviour”, Pugh says. “At NAB, lending activity has picked up across the past two months. First-home buyers are returning, upgraders are back in the market – lower rates are clearly improving confidence, not just borrowing capacity.
“This isn’t a boom, but the tone has changed”, he adds. “Sellers are adjusting their expectations, buyer confidence is up, and the market is functioning with a level of stability we haven’t seen in some time.”
Second only to the busy spring period, April through to early June is typically one of the more active periods for real estate. This year, however, it’s broken up by public holidays. The Easter break and Anzac Day fall in close succession, which could lead to fewer auctions and a more staggered flow of listings.
Pugh believes, though, that for buyers, that’s not necessarily a bad thing. “With less competition and more room to negotiate, some might find this a more manageable time to purchase”, he says.
“Sellers are generally more flexible during slower weeks, and serious buyers who are ready to move often have the advantage. Buyers could look to take advantage of listings that are available during this period.”
The key question is what happens next, Pugh suggests.
“If inflation continues to fall and the Reserve Bank lowers rates again next month – which is what we expect – we’re likely to see further price growth and more buyer activity heading into winter. That could mean stronger competition in the second half of the year, particularly in capital cities where supply remains tight.
For now, though, autumn has offered a relatively stable backdrop, with moderate price growth, steady demand, and improving sentiment, Pugh says, adding that nevertheless, uncertainty lingers and buyers and sellers will most likely be keeping one eye on the headlines.