2023 might have the best housing market conditions for potential buyers to take the plunge.
Real Estate Buyers Agents Association (REBAA) president Cate Bakos even went so far as to say that the next few weeks would be the “best time in a decade to make a cheeky offer” after the latest rate hike by the Reserve Bank of Australia (RBA).
“With no cash rate moves due to January being an RBA meeting block out, there are some buyers who have used the time to get themselves ready with mortgage pre-approvals in place,” she said.
“Certain lenders are offering a three-month validity period regardless of rate movements and a lot of consumers who are subjected to borrowing capacity constraints are going down that path.”
Ms Bakos said many buyers are likely to be ready soon while savvy investors would likely take advantage of the negative consumer sentiment.
“We continue to maintain that the second half of 2023 will see increased buyer energy as those buyers who are waiting for the market to bottom will see that the cash rate reaches equilibrium and some level of certainty returns in respect of the RBA,” she said.
Optimism manifests in auctions
According to the latest Apollo Auctions Auction report covering December 2022 to January 2023, there was an increasing number of attendees and bidders at auction at the start of the year.
Apollo Auctions director Justin Nickerson said while fewer auctions are held traditionally over the December to January period, solid activity was still recorded in most capital cities.
“Our team of auctioneers are reporting an optimistic start to the 2023 property year, which is evident from the increasing numbers of people attending and bidding at auctions,” he said.
Brisbane, for instance, recorded a clearance rate of around 65%, up 58% in November.
And while Sydney’s auction take-up slowed down, it could be explained by the holiday period.
“With the rising interest rate cycle appearing be nearing its peak – and with hundreds of thousands of overseas migrants expected this year – it certainly appears that this year is looking like a more positive one for property buyers, sellers, agents and auctioneers,” Mr Nickerson said.
The average number of registered bidders at auction increased from 2.8 to 3.3 and the average percentage of active bidders rose from 54% to 57% over the same period, according to report.
Interestingly, some auctioneers in Brisbane witnessed increased instances of pre-auction offers, leading to the growth in the share of properties sold pre-auction.
“Good agents are utilising the auctioneer in a more proactive fashion in the lead up to auction day in Brisbane – allowing an objective third party to influence the reserve price expectations as early as possible.”
In the Gold Coast, December and January represented bumper months for the market.
In fact, there were 3.1 average registered bidders in the Gold Coast, with 55% participating in the auction market.
“Auctions continue to deliver great results in a timely manner on the Gold Coast, allowing sellers to understand the market, and giving buyers a date to be ready to make a decision and seize the moment,” Mr Nickerson said
While activity in other areas like Melbourne, Perth, and Canberra were affected by the holiday season, Mr Nickerson said participation in these markets remained elevated.
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Photo by Porapak Apichodilok from Pexels.
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