Flint Monthly - Market Update
In our last update on 14th August, we mentioned that we believed the sharp change in short-term interest rate expectations would correlate with a substantial increase in buyer activity and urgency. As we expected, the last four weeks have played out that way.
The Flint team has seen many clients who put their plans on hold from previous years up to early 2024 come back to us with a new sense of urgency to buy and a desire to make a deal happen, which we have not seen for a couple of years.
In particular, the most noticeable increase has been with our higher purchase price buyers over $1-2m+, whereby buyers who have been waiting in the background patiently have flipped to wanting to enter the market to secure something ASAP.
Contrary to many market commentators who said prices were cooling down or falling, we believe median value figures will reveal that prices are rising reasonably strongly again based on buyers' higher urgency and higher market price points beginning to bounce.
Buyers, however, are hamstrung by the tightest borrowing capacity we have ever seen and minimal cash availability. Therefore, market growth will be slow until more borrowing capacity and lower rates arrive.
On another note, one of the more exciting parts of this time of year is finding new property to look at. We have seen an explosion in news articles stating that listings are bursting onto the market; they are much higher than a year ago, and buyers have an incredible choice, and it could not be further from the truth.
The chart below, which contains data from SQM Research, shows that national property listings have fallen dramatically over the last decade. Even though the number of properties increases yearly, the number that sells yearly is decreasing.
We believe the jump in listings in the last few weeks is similar to 2023, whereby spring listings are coming on earlier than usual as agents try to convince their vendors it is a great time to sell earlier in Spring as they need more sales, potential market uncertainty, and the story that there is not enough property on the market.
Flint's advice to current buyers right now is that once you are clear on your maximum purchase price and best loan structure to protect your family with buffers, be careful not to become obsessed with one or a couple of properties on the market or sit back and think more listings will continue until the end of the year. You could easily find yourself 4-6 weeks down the line and chasing your tail going into November.
Quality assets will move incredibly fast, early in campaigns, pre-market, and under intense competition. So, the best way to act in this market is to be highly focused, open to different suburbs and property options, and proactive in making offers if a quality asset ticks most of your preferences without significant dealbreakers.
