Message from Dan White, Ray White Group Managing Director

Over the past few months, it’s been fascinating to witness the shift in media reporting on the state of the Australian property market. It has quickly become foreboding. True, it’s not as foreboding as it was this time two years ago when media commentators were unanimous in predicting a drop in property values of up to 30 per cent (only for them to rise by 30 per cent!). However, the overall message being presented is clear and consistent that the market is struggling.

It’s true that the dynamics of the market have changed since the start of this year. The simplest way to illustrate this is to look at listing numbers and sales numbers. Across Australia, we listed 7,700 properties for sale in March and sold 6,100. In the same month last year, we listed 7,300 properties for sale and sold 6,900. The average number of active bidders per auction fell from 3.5 last March to three in March this year.

The problem with the above paragraph is that it lacks any meaningful context. It simply compares current activity against what was the most remarkable period of real estate activity in this country’s history. For context, we sold $6.7 billion worth of property in Australia in March, which was $300 million more than the value of property sold as of March 2021 (highlighting the increase in property prices over the past 12 months). It was our biggest March result ever, and our second biggest month ever. While our average bidder numbers dropped, they’re the highest numbers recorded at any time other than in 2021.

Clearly, as reported, the prospects of increasing interest rates is a downside risk for our housing markets. We’ve always believed that community expectations of where interest rates are going is more important than any actual interest rates movements. Is it fair to think that current buyers are already factoring in higher interest rates in their decision making, given the extensive amount of media commentary on the subject? If so, how much higher?

If and when interest rates change, we will discover answers to these questions.

We know that most of our customers sell and then buy in the same market. Accordingly, ensuring that every sale campaign obtains the best possible result
available in the market is critical to creating value for our customers. We trust that the information available in this edition of Ray White Now, together with the knowledge and commitment of our local members, empowers all of our customers in their decision making.

Dan White
Managing Director
Ray White Group