The housing market has peaked in its rate of price growth and its advantage to sellers, and will now slowly revert back in favour of buyers, according to a leading real estate network.
Revealing its inaugural Buyers’/Sellers’ Market Index, LJ Hooker said a majority of markets had hit a new level in favour of sellers in the third quarter of this year, and would now gradually return back in favour of buyers.
According to the analysis, over the third quarter New South Wales, Victoria and Queensland markets showed the states recorded their ninth consecutive quarter of favourable selling conditions, whereby sales outstripped listings.
Contrasting conditions were found in Western Australia and the ACT (balanced), Tasmania (buyers) and many regional markets, which have been influenced by local economic conditions, LJ Hooker said.
LJ Hooker national research manager Mathew Tiller said the index had moved further in favour of sellers during the third quarter.
“LJ Hooker found the number of sales again outpaced the number of new listings in the third quarter,’’ he said.
“This is not uncommon, having happened in four of the last nine quarters.
“But what is important to note is the index was a record result in favour of sellers and may have reached its peak,” he added.
Mr Tiller said according to the Australian Bureau of Statistics (ABS), the rate of growth of finance commitments peaked in the second quarter after considerable growth over the last three years.
“Trends show a quarterly lag between finance approvals and sales, suggesting the rate of price growth may have also reached its peak,” he said.
“As price growth returns to a more sustainable level and listings come on to the market for the spring and summer selling seasons, we forecast a gradual shift back towards a buyers’ market.’’
LJ Hooker’s head of real estate, Christopher Mourd, said it was evident listings were unable to meet demand.
“LJ Hooker’s network of offices are commonly reporting that many owners are viewing the low interest rate environment as an opportunity to upgrade,’’ said Mr Mourd.
“However, many won’t commit to listing their home until they’ve found their next home. This preference has created a shortage in supply, and heavily weighted the index in favour of sellers going to market now.
“However, our research indicates conditions will soon change. Sellers have to move quickly before the pendulum swings back toward buyers,’’ he added.