Rates having diminishing effect on market
A SHORTAGE of listings is the biggest concern facing east coast property markets, even with continued low interest rates, according to the nation’s leading real estate network LJ Hooker.
Chief Executive Grant Harrod wasn’t surprised by the Reserve Bank of Australia announcement today to keep rates unchanged, as it waits to see the impact of previous reductions.
But while focus is fixed on whether Sydney and Melbourne are in the middle of a housing bubble, he believes the real issue is the lack of stock, particularly over winter.
“It has remained very tight and hence there is a classic demand and supply issue,’’ Mr Harrod said.
“Our research shows there is interest from vendors to list their property but the issue of `don’t sell until you buy’, has created a Catch 22 situation and it is keeping pressure on prices.
“Concern about finding a new place after selling is also seeing a trend of people requesting longer settlement periods.’’
A marketing campaign by LJ Hooker in June _ the first ever held in winter _ resulted in a 30 percent increase in the number of appraisals, which could indicate a bumper spring ahead.
A rise in the number of listings could be the answer to affordability concerns see in the Sydney and Melbourne markets over the past 12 months.
Mr Harrod is encouraging vendors who have been contemplating selling to act now before the traditionally busy end of year period. He believes there is the potential to capitalise on a strong winter market, which is being fuelled by lack of competition.
“There are lots of buyers, we are still getting big numbers to open homes, so the notion that my house won’t be worth as much because the leaves are not on the tree, is not true,’’ he said.
LJ Hooker National Research manager Mathew Tiller said the RBA will adopt a ``wait and see’’ approach to interest rates over the coming months.
Latest figures show Adelaide, Hobart and Brisbane prices are showing improvement, however, it will take a few more months before the impact of the May rate cut filters through across all markets.
Mr Tiller believes record prices being paid in Sydney, could be helping other states, with investors now looking further afield for more affordable property.
“It is likely they are now focusing on opportunities outside their own home State,’’ he said.