The LJ Hooker Group believes a healthy level of demand will remain in the market even with further interest rate rises as investors and buyers look to take advantage of current conditions.
The Reserve Bank of Australia lifted the cash rate for the sixth consecutive month – up 25 basis points to 2.60% – to its highest level since 2013 in response to record inflation levels after the pandemic.
LJ Hooker Group Head of Research, Mathew Tiller, believes improving affordability, low unemployment rates and higher rental growth will ensure buyer demand slowly improves.
"The good news is that we can see signs of activity picking up with auction data showing clearance rates in Sydney have been above 60 per cent for the past four weeks," he said.
"Interest and enquiry levels from investors have improved due to low rental vacancy rates and higher tenant demand pushing rents considerably higher over the past 12 months. The changing conditions will likely also see bargain hunters emerge looking for a property with potential for future capital growth."
Today's rate announcement by the RBA coincides with a slower start to the spring market – usually considered the busiest time of the property calendar. An additional public holiday due to Queen Elizabeth II's Memorial Day plus the October long weekend also impacted September sales.
Evidence suggests listings are likely to pick up in the coming weeks, with homeowners gathering advice and weighing up their options on whether to sell now or hold off until the New Year.
The LJ Hooker Group has seen listings increase across its network, up 4 per cent from last month and 1.4 per cent higher than last year.
The number of home appraisals conducted by LJ Hooker agents also increased by 5.2 per cent last month and 12.3 per cent higher than last year.
Mr Tiller said the latest rate rise will see people continue to reassess their borrowing capacity and serviceability.
"In turn, 'days on market' is likely to rise as buyers become choosier about the homes, but we expect to see more activity in late spring," he said.
"There are some positive signs in the economy with latest GDP results strong at 3.6 per cent driven by household spending and exports, while unemployment remains buoyant at 3.5 per cent. Although there remain some major global inflationary issues which the RBA can't control such as the US inflation, Ukraine war and UK economic woes."
As uncertainty about market conditions abounds, LJ Hooker agents continue to be highly active in advising their customers about what is happening within their local market.
