Property market expert Cameron Kusher has warned that sellers are facing an increasingly difficult environment as the Australian housing market continues to slow. According to Kusher, the combination of rising interest rates, higher listings, and falling prices is creating a challenging landscape for vendors.
Market Slowdown Intensifies
Kusher, a well-known property analyst, noted that the market has shifted significantly from the boom conditions seen in 2021. "We are now seeing a clear slowdown in the property market, with auction clearance rates declining and more properties sitting on the market for longer," he said. Data from CoreLogic shows that national home values fell by 0.6% in March, marking the first monthly decline since August 2020.
The number of properties listed for sale has also increased, giving buyers more choice and reducing urgency. In Sydney, listings are up 12% compared to the same time last year, while Melbourne has seen a 15% increase. This shift in dynamics is putting pressure on sellers to adjust their price expectations.
Sellers Face Difficult Decisions
Kusher emphasized that sellers need to be realistic about pricing in the current market. "Sellers who are not prepared to meet the market may find their properties languishing on the market for weeks or even months," he said. He advised vendors to seek professional advice and consider market conditions before setting a price.
The expert also highlighted that the slowdown is not uniform across all regions. Some areas, particularly those that experienced strong price growth during the pandemic, are seeing sharper declines. For example, regional areas that boomed during the pandemic are now experiencing a correction, with some markets seeing price drops of up to 5%.
Impact on Buyers
While the slowdown is challenging for sellers, it presents opportunities for buyers. Kusher noted that buyers now have more negotiating power and can afford to be more selective. "Buyers who have been waiting on the sidelines may find that the market is now more favorable for them," he said. However, he cautioned that rising interest rates mean borrowing capacity is reduced, which could limit some buyers' ability to purchase.
The Reserve Bank of Australia has raised interest rates by 25 basis points in March, with further increases expected. This has reduced the maximum borrowing capacity for many households, particularly first-home buyers.
Outlook for the Market
Looking ahead, Kusher predicted that the market slowdown will continue in the coming months. "We are likely to see further price declines as interest rates rise and affordability constraints bite," he said. He expects that the market will bottom out by the end of 2023, but this will depend on the pace of interest rate hikes and broader economic conditions.
Kusher also noted that the rental market remains tight, with vacancy rates at historic lows in many cities. This is putting upward pressure on rents, which could further impact housing affordability.
