Potential homebuyers who are trying to gauge whether it’s the right time to take the plunge should consider recent trends that indicate where the market is currently going.

According to CoreLogic, slowing buyer demand, tighter lending conditions, and rising affordability constraints contributed to the easing in Australia’s dwelling price growth in February.

National home values grew by only 0.6% in February, the lowest growth since October 2020.

On an annual basis, Brisbane performed strongest, with a 29.7% growth in the median dwelling price in February. Regional NT clocked the slowest annual gain at 7.1%.

CoreLogic listed other market trends that potential buyer should be aware of, including:

  • Longer days-on-market – It now takes slightly longer to sell as new listings start to rise. Over the three months to February, a home takes up to 30 days to sell, up from the recent low of 21 days in the final quarter of 2021.
  • Record-low discounting levels – The low discounting levels indicate strong selling conditions.
  • Softening of clearance rates — Auction take-ups averaged 72.4% over the four weeks in February, down slightly from 78.8% during the same time last year. The continued growth in house prices could further soften clearance rates.
  • Record-high lending – Finance commitments for property purchases reached a new record at the start of the year to around $33.7 billion, roughly a third of which were for investor purchases. Despite this, the growth in lending has slowed to 2.6% in January, down by 4.4% in December.
  • Elevated sales volume — Despite the affordability constraints, sales volume maintained its uptrend, rising by 37.7% over the year to February.

When's the right time to buy?

McGrath Estate Agents executive director John McGrath said while market trends, particularly the movement of prices, are something to consider when buying a home, the decision of the homebuyer should ultimately depend on two things: personal needs and affordability.

“That rule applies no matter what the market is doing — a home is a home, first and foremost, and a financial asset second,” he said.

"Need to upsize for a growing family?  Need to downsize because the kids have left home? Go ahead and do it."

For Mr McGrath, there is nothing wrong with buying during the end of a growth cycle, as most homebuyers live in their new homes for the next 10 to 20 years.

“Over a typical decade, you’re likely to see one boom or strong growth cycle, which we’re in now; one slower period when prices can sometimes pull back, and a bunch of years where not much happens at all,” he said.

This makes it crucial for buyers to hold for the long term — waiting out the slower years to be rewarded when the next growth cycle begins.

“Whatever you pay today is going to look cheap in 10 years’ time. So, forget market timing — get the location right, only buy quality, keep within your budget, and most of all enjoy your new home,” Mr McGrath said.

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