Buyers could find themselves spoilt for choice with further interest rate increases likely to see sellers look to make the most of the spring selling season, according to the LJ Hooker Group.
The Reserve Bank of Australia's decision to move the cash rate for the fifth consecutive time, up 50 basis point to 2.35%, is unlikely to see a rush of listings, but those having to sell due to personal circumstances are likely to go to market sooner rather than later.
LJ Hooker Group Head of Research, Mathew Tiller, said while there is more stock coming onto the market, the number of overall listings is still behind the long-term average.
"Those who had planned to list in spring will likely try to go earlier, hoping to maximise their price encouraged by recent improving clearance rates," he said.
"While we will continue to see people sell due to the three 'D's – death, divorce or debt – a large wave of forced listings coming onto the market is unlikely. Strong jobs figures will give people confidence that they will have work for at least 12 months and can therefore absorb further rate increases."
Mr Tiller expects the cash rate to reach three per cent during the RBA's current cycle of increases, which is likely to continue into early to mid-next year.
Latest figures from CoreLogic show property price declines in every capital city except Darwin. The biggest falls were recorded in Sydney (-2.3 per cent) followed by Brisbane (-1.8 per cent), Canberra (-1.7 per cent), Melbourne (-1.2 per cent) and Adelaide (-0.1 per cent). After almost two years of price surge, regional values are also falling 1.5 per cent.
Preliminary auction clearance rates in Sydney last weekend reached 62 per cent – the highest figure since May.
While homebuyers will be cautious about overspending, Mr Tiller believes the level of new stock hitting the market in the coming months – along with vendors willing to negotiate - could prove to be attractive.
"There is still demand for newly renovated homes or new homes because construction costs and the availability of trades to complete work is hard to come by at the moment," he said.
"We also expect to see investors coming back into the market given the improvement of rental yields as prices soften, and rents continue to climb."
