Real estate agents are hitting the phones, with some facing redundancies or career pivots, as listings pile up and homes stay on the market for longer. House prices are already falling in Sydney and Melbourne, and listings are surging compared with last year, as housing sputters into an expected nationwide correction of up to 10 per cent, brought on by high interest rates and tax changes in the federal budget.
“We’ve spoken to agents across Sydney and Melbourne, and many say the market fell off a cliff after budget night,” independent price tracker Spachus Aus said in an update on Thursday. “Some are even having to make staff redundant. With investors making up around 42 per cent of housing loans, it’s a reminder of how quickly this can impact the market.”
The data firm said homes in every major city had recorded an increase in median days on the market compared to last month. Sydney and Melbourne properties reached 30 days, up 6 days and 4 days respectively. Not only are listings hanging around on the market for longer, but there are more of them — both cities have seen a 12 per cent rise in total property listings compared with last year, according to figures released this week by SQM Research.
The Block auctioneer and real estate coach Tom Panos said while it’s far from a “mass exodus”, he’d heard of some agents leaving the industry. “There were already marginal agents — I’m talking about real estate agents who were just getting by when the market was booming — they’re the ones that are vulnerable,” Mr Panos told news.com.au. “A lot of these agents are reaching out to recruiters, looking at trying to get into related segments of the market, because they’ve been impacted by the lower volume.”
As an example, Mr Panos knew of one agent who inquired about leaving residential real estate and moving into new developments, thinking that the tax reforms in the budget might be more beneficial for that marketplace. “There are others, of course, that came into the industry when the market was booming and they’re leaving the industry now that it’s not. And that is something that happens seasonally, it’s happened in the 40 years that I’ve been in the industry.” From the perspective of veteran agents, it was “good to see some of the cowboys might leave”, Mr Panos added, cautioning that it was too early after the May 12 budget to judge its full impact.
Homeowner Swamped with Agent Calls
The dire market conditions appear to be prompting agents to turn on the charm as they scramble to raise sale volumes. South Sydney homeowner Scott Warren said he was accustomed to getting the odd pitch from agents eager to sell his property, but hadn’t heard from any in months before a recent deluge of calls. “In the last two weeks I’ve probably had six or seven agents calling to see if I might be interested in selling, and trying to spin that it would be a great time to go on the market — at the start of winter, at the start of a price crash,” Mr Warren told news.com.au. “Full credit to them for trying to present a positive outlook, but I think anyone who reads any news is aware that it’s not the case right now. With the sheer number of them in such short order, I can only imagine they’re just trying to fill their shelves with something to sell.”
The Sydneysider said there were a couple of agents he knew personally who would check in, but these calls were from “complete randoms who have bought a database and they’re just working through it”. Sydney and Melbourne prices, which fell 0.9 per cent and 0.8 per cent respectively over the past month, are beginning to weigh on national house price growth. The national figure flatlined in May, with a monthly increase of precisely 0 per cent, according to Cotality figures released on Sunday. It came as the auction clearance for the combined capital cities fell to 54.5 per cent, the lowest rate since April 2020.
Housing measures in last month’s federal budget included restricting negative gearing and replacing the capital gains tax (CGT) discount with an indexation model for established residential property — two changes aimed at warding off investors. But the housing market was already showing signs of cooling before the budget, thanks to consecutive 25-basis-point hikes by the RBA in February, March, and May, bringing the official cash rate to 4.35 per cent.
Commonwealth Bank and ANZ are predicting that the cash rate has peaked and will be held for an extended period. NAB is tipping a 25-basis-point hike in August, bringing the cash rate to 4.60 per cent. Westpac is forecasting two additional 25-basis-point hikes in August and September, which would bring the cash rate to 4.85 per cent.
