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June 2022 Sales Update
over 2 years ago
June 2022 Sales Update
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RISING RATES & LOWER SENTIMENT


Housing markets lost more steam in May as a combination of higher interest rates, rising inventory levels and lower sentiment dampened conditions.

CoreLogic’s Home Value Index (HVI) showed Sydney (-1.0%) and Melbourne   (-0.7%) dwelling values continued to record the most significant month-on-month falls, while Canberra (-0.1%) recorded its first monthly decline since July 2019.

Although housing values continued to rise across the remaining capitals, the growth was not enough to offset the depreciation in Sydney, Melbourne and Canberra, which pushed the combined capitals index -0.3% lower over the month.

 

Monthly change in capital city home values

 

                                                                  MONTHLY                               ANNUAL

Sydney                                                      q 1.0%                                       p 10.3%

Melbourne                                              q0.7%                                        p 5.8%

Brisbane                                                   p 0.8%                                      p 27.8%

Adelaide                                                  p 1.8%                                       p 26.1%

Perth                                                          p 0.6%                                      p 5.6%

Hobart                                                       p 0.3%                                       p 17.3%

Darwin                                                       p 0.5%                                       p 6.4%

Canberra                                                  q 0.1%                                       p 18.7%

 

National                                                   q 0.1%                                       p 18.7%

 

Growth continues everywhere but Sydney, Melbourne & Canberra

Sydney has been recording progressively larger monthly value declines since February, while Melbourne has fallen across four of the past six months.

Since peaking in January, Sydney housing values are down -1.5%, but remain 22.7% above pre-COVID levels. Comparatively, Melbourne, which experienced 

a softer growth phase, has recorded a smaller peak-to-date decline of -0.8%, with housing values now 9.8% higher compared to the pre-COVID level.

Canberra, Australia’s second most expensive property market behind Sydney, has experienced nearly three years of consistent positive growth and although dwelling values increased 2.2% in the three months to May, softer house values and affordability constraints are likely to have had an impact. Accounting for the marginal decline evident in May, Canberra housing values remain 37.9% higher vs. pre-pandemic levels.

Outside of Sydney, Melbourne and Canberra, growth trends remained positive in May, albeit with less momentum in most markets. Perth and Adelaide were the exceptions, where the quarterly growth trend lifted in May, although both regions remain below the peak quarterly rate of growth.

 

High inflation and cost of debt drive market shift

CoreLogic’s Research Director Tim Lawless said despite the 0.5% rise in housing values across Australia’s combined regional areas, it was not enough to keep the national index in positive monthly territory, with the national HVI down -0.1% in May, the first monthly decline in the national index since September 2020.

“There’s been significant speculation around the impact of rising interest rates on the property market and last month’s increase to the cash rate is only one factor causing growth in housing prices to slow or reverse,” he said. It is important to remember housing market conditions have been weakening over the past year, at least at a macro level.”

Mr Lawless noted the quarterly rate of growth in national dwelling values peaked in May 2021, shortly after a peak in consumer sentiment and a trend towards higher fixed mortgage rates. “Since then, housing has been getting more unaffordable, households have become increasingly sensitive to higher interest rates as debt levels increased, savings have reduced and lending conditions have tightened,” he said.

 


SELLING YOUR HOME AND UPSIZING YOUR FUTURE


At some point all of us reach a point where our current property no longer meets our specific needs. Maybe we need more space for a home office, a backyard and a shed, or there are about to be more people in the house! Whatever the reason, there are four things to consider when selling an existing home and buying something bigger.

Can you afford to upsize?

Even if you don’t have a lot in savings, you can still leverage the purchase of the new home from the equity in your existing property. Buying bigger will inevitably increase your financial outgoings so make sure you have a good sense of your existing budget and how it will change. Also factor in your savings and the realistic estimate of the sale price of your existing home, to be sure that this is a good financial decision as well as a necessary personal decision.

Should you sell before you buy the second house or wait?

If you’re upsizing because your financial situation has improved, then you may be in a good position to manage two mortgages at once (if you buy your second home before the first is sold). However, a more cautious approach would be to sell your existing property first, then move into the buying process, knowing exactly what your financial commitment to the next property can be.

 


HOW RETIREES CAN HIRE A GREAT AGENT TO SELL THEIR HOME


The decision to sell as a retiree is almost always intrinsically linked to whatever is planned for the next stage of your life – from financing the balance of your retirement to further expansion of your property portfolio.

Too many retirees are subjected to disrespectful, dismissive behaviours from a range of professionals, so be sure you know your goals going in and stand your ground when required. These tips will help you interview your prospective agent and find the best possible person to help you to achieve your property goals.

 

1. Who, where, what, and why

In any first-time meeting with someone new there is inevitable ice breaking chit chat, which not only eases people into conversations, it also offers key information about the agent you might be working with. Questions about where they’re from, where they live, where they grew up, how long they’ve been in the game, whether they’re single, married or in a relationship, parenting, or empty nesting, and so on, all provide key details for you about who you might be dealing with. The exchange works both ways too – they might ask personal questions of you as well. The answers are useful for everyone involved as they give clear detail on who you all are, what you each want out of the relationship and how compatible you think you might be to work on the sale of your property together.  

 

2. What’s their cred in the local area?

If you’ve lived there a long time and your prospective agents claims to be well established in your neighbourhood and surrounds, chances are you’ll have common ground to explore. You should know some people in common, have kids or grandkids that went to the same schools, or maybe share a favourite local barista or pizzeria. These personal insights mean they might have a foot in the door for new buyers to the market, or opportunities that may not have become public yet. In addition, though, they should be able to offer some real time insights about what’s been happening locally regarding property listings, rentals and urban developments and future projects.

 

3. Who is their back up?

Asking if they work independently or have close engagement with the office team will tell you what back-ups you have if you can’t reach the agent on the phone, or if they fall ill or have an emergency. Many real estate offices have close knit teams, who work with sophisticated software and communication tools that can provide you with up-to-date information as soon as you need it. This team focused approach also shows that your agent is realistic about the process and with the ability to share the workload, can approach your needs with more diligence and patience – a quality that is highly appreciated by seniors in particular. 

Remember – do your research, ask the questions, listen, and reflect on the answers and trust your instincts. If it doesn’t feel right, keep looking and find someone else!