In spring 2024, Australia’s real estate market presents a complex picture. On one hand, reports highlight that homeowners favor selling properties at year-end, with November standing out as the best sales month. Property prices rose by 0.78% in November, exceeding the annual average. This trend echoes the market boom of October-November last year, marked by increased transactions and higher-than-usual sale prices. February and March are also considered ideal selling periods, with prices similarly above average.
Nationally, November emerged as the peak price month. Based on data from 2014-2023, properties priced at an average of AUD 880,000 could earn sellers an additional AUD 7,000 when sold in November. Both year-end and early-year periods are prime sales seasons, with year-end being particularly strong. Property prices in October, December, February, and March all exceeded the average, reflecting heightened market activity and concentrated buyer demand. In contrast, June and July are the weakest months for property prices, with lower transaction volumes and fewer buyers.
However, challenges lurk behind the spring real estate market’s apparent prosperity, particularly in Sydney. October marked the first price decline in 21 months, closely tied to a surge in property listings. High interest rates prompted many homeowners in Melbourne and Sydney to sell, leading to spring property listings surpassing five-year norms. Listings in Melbourne increased by 10.1%, while Sydney saw a 12.3% rise.
Despite some revitalization in the high-end market, such as a four-bedroom villa in Melbourne’s Prahran selling above expectations, the overall clearance rate has declined. In the week ending November 16, auction volumes rose along Australia’s East Coast, but clearance rates dropped to the third-lowest level this year. Sydney’s preliminary clearance rate fell to 63.4%, the second-lowest this year.
Amid these dynamics, AMP Chief Economist Shane Oliver highlighted that the interest rate cut awaited by mortgage holders is unlikely to materialize this year. He predicts the Reserve Bank of Australia will initiate the first rate cut in February next year. This forecast has made buyers more cautious, while homeowners under mortgage pressure are opting to sell at higher prices to ease financial burdens. Despite these challenges, property prices in cities like Sydney and Melbourne remain on an upward trajectory, albeit with slower growth.
Advice for Buyers: buyers should remain cautious. It is recommended to closely monitor interest rate changes and market trends to avoid following the crowd blindly. When purchasing a property, it is essential to consider your own financial situation and capacity, ensuring that you select a property that fits your needs. On one hand, focus on high-end markets or potential areas with investment value. On the other hand, working with professional real estate advisors to obtain more market information and expert advice will help you make more informed decisions.
