Lack of Choice Provides an Incentive for Sellers Looking To Make a Move

A changing market has been holding back sellers from listing their property for sale, but a recent uptick in buyer competition due to low stock levels could provide motivation, according to the LJ Hooker Group.

The Reserve Bank of Australia’s decision to increase interest rates for the 10th consecutive month is likely to keep listings tight throughout Autumn. Latest CoreLogic figures show property listings are more than 15 per cent down from a year ago and still well below average levels.

LJ Hooker Group’s Head of Research, Mathew Tiller, said those considering downsizing their mortgage and moving to a smaller or more affordable property may find an incentive to take action. 

It has been a positive start to the property year with more people attending open homes and improving auction clearance rates which have pushed 60 per cent nationally. 

“Employment remains strong and wage growth has improved slightly – so many people are content to sit out of the current market and put their plans to move on hold, but there are those who may be contemplating downsizing their mortgage or looking for something more affordable and this could be the right motivation,” he said.

“The lack of choice is putting pressure on buyers and this is helping to lift prices in some areas, and while buyer competition is currently a long way from the ‘FOMO’ levels experienced in 2021, it is definitely higher than the end of last year.  

“Vendor expectations have become more realistic and more people are willing to meet the market.” 

Investor enquiry is also on the rise due to attractive rental growth, although they are yet to jump back into the market and will be dependent on whether they can afford higher interest rates. 

“Those tenants who are in a position to buy will be trying to get out of the rental market and this will also add to the pool of active purchasers throughout Autumn,” Mr Tiller said. 

Uncertainty remains about what will happen when a large number of fixed-term mortgages begin to expire later this year. Mr Tiller said the market would be able to cope with increased listings whether due to people exiting their mortgages or just due to normal increases. 

“People are working through their financial situation now either by talking with their bank or finding another lender,” he said.

“It is likely banks will be doing everything they can to keep the mortgage holder as a customer and will be more willing to renegotiate or provide a repayment holiday rather than repossessing a home.”