Winter is over and we can hopefully start to say goodbye to colder weather as we move into spring and then head towards a hot summer.
Spring is the busiest time for the residential property market as more buyers look to sell. This year it will be no exception so what else can we expect to see this season?
1. More houses on the market
Spring is the preferred time for people to go to market. For some, it is because their gardens look best or if they are located close to the beach, the promise of a lifestyle can be a good selling point.
It may just be because there are more buyers out there or because agents are less likely to be on holidays. Regardless, if you are a buyer, there will be more choice out there.
2. High clearance rates in strong markets
Clearance rates in both Melbourne and Sydney have been over 70% for some time now. In Sydney, recent weeks have seen them exceed 80%.
While more stock on the market may reduce them, the strong performance of these markets on other housing indicators such as price growth, as well as more general economic data, would suggest that they will remain high.
3. More premium property entering the market
Premium houses are more likely to sell in Spring.
If you have a very expensive house and you are looking to sell, chances are you will look to spring. More premium property enters the market in this season.
The drivers are likely to be similar to the rest of the market (e.g. nicer gardens) however, a high proportion of these properties also have water views which tend to look best in spring as well.
4. No change in interest rates
The next move in interest rates is likely to be down however, my tip is that the Reserve Bank will wait until the start of 2017 to make a move.
The bank now expects inflation to remain low until the end of next year, so unless there is some particularly bad news with GDP or unemployment figures they are likely to hold rates until next year. The movement of US rates will also be high on their watch list.
5. Stable or declining prices in some capitals
Dynamics are very different across capital cities when it comes to price growth. Brisbane, Darwin, Adelaide and Perth have all seen prices decline over the past month. Adelaide has seen moderate growth while in Melbourne and Sydney increases remain strong.
Over the next three months, expect to see Melbourne and Sydney growth continue while conditions for price growth remain more muted in other capital cities.
6. Rents declining
Lots of development and more investors in the market has meant that rents have been steadily declining. Over the past year they have dropped on average 0.3%.
It is likely that this steady decline will continue however across capital cities there is likely to be divergence. Sydney and Melbourne continue to see rent rises, driven by strong economic and population growth in those cities.
Surprisingly Hobart has seen some of the strongest rental increases of all capital cities and given no major changes expected to supply, economic growth or population growth over the next three months, this is likely to continue.