Australian homebuyers have a few months left to take advantage of the vendor discounts amid the slowdown in dwelling price growth, says an expert.
Buyers Agency Australia founder Dragan Dimovski said interest rates will likely stabilise or even fall by February next year, which could potentially help revitalise housing activity and see housing demand bounce back.
“That means there could be less than six months for buyers to take advantage of the current buyers’ market, where discounts of 10% to 15% can be found with reduced buyer competition,” he said.
“People will become accustomed to the new interest rate levels once they stabilise, just as we were comfortable borrowing and buying when the cash rate was over 7% back in 2008.”
But before stabilising early next year, economists from the big-four banks are forecasting another 50bps hike this month, which would bring the cash rate to 2.35%, the highest since December 2014.
While buyers still have time to shop around and consider several options, Mr Dimovski said opportunities will soon become limited as buyers adapt to the state of interest rates.
“I am advising my clients to buy before the end of 2022 if they can. If you buy now you can make almost instant equity, by securing that discount before prices start to rise again,” he said.
A recent study by Well Money identified 20 suburbs where first-home buyers can purchase units with prices of below $600,000 this spring-selling season.
The current spring-selling season will likely see a rise in listings coming to the market, which would mean more instances of vendor discounting.
Figures from CoreLogic showed an 11.3% annual growth in the number of homes available for sale in August.
This increase is more likely indicating the slowing of housing demand rather than a rise in the number of new listings.
CoreLogic research director Tim Lawless said new listings across capital cities typically go up 22% between winter and spring based on the pre-COVID, five-year average.
“The flow of new listings this spring season may not be quite as active with the housing downturn dissuading some prospective vendors, but we are likely to see more listings added to the market than in winter,” Mr Lawless said.
Mr Lawless, however, expects less buying activity as higher interest rates and low sentiment continue to weigh on demand.
“Should this scenario play out, the net result will be an accumulation of advertised supply that could further weigh down values,” he said.
“Amid higher advertised stock levels, vendors will be competing across a larger pool of available supply for fewer buyers — while this is positive news for buyers, sellers will need to be realistic in their pricing expectations and ensure they have a quality marketing campaign in place.”
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