Is the property market holding its breath?

The frenzy of the post-COVID property boom has eased, with many buyers entering their discerning era - relishing in the newly carved out room to breathe.

Is it buyer hesitancy? Potentially. Is it group psychosis? Not quite.

What we’re seeing right now is a rational response to an irrational amount of noise.

Looking at recent headlines, it’s not hard to see why. In the wake of the Federal Budget, and the announcement of sweeping changes to property tax, you’d be excused for thinking the property market officially tanked.

Interest in auction clearance rates and open home attendance has never been higher - with media outlets hungry for data and commentary from the country’s property economists.

But is the market in a downturn? Or has the Federal Budget delivered a circuit breaker for investor sentiment, tempering what was a consistently heated and competitive marketplace. Between the lingering pressure of interest rate rises and the Budget changes to CGT and negative gearing, the narrative has shifted from “must buy now” to “wait and see.” And that’s not necessarily a bad thing.

First homeowners anecdotally report less competition from investors at local auctions. Despite negative gearing being grandfathered, the impact is psychological - investors are assessing their strategies moving forward, and potential owner-occupiers are questioning if the rules of the game have just shifted in their favour.

The housing supply pressure, however, hasn’t changed. It’s merely shifted. With less investors in the market, coupled with incentive to hold grandfathered investments, the rental market may be squeezed in established markets. However, less activity and interest means that serious buyers have room to breathe. They can stop, be discerning and intentional when climbing onto the property ladder - rather than feel pressure to get on or miss out.

Ray White’s Beyond the Headlines webinar, directed at Ray White investment customers, received thousands of registrations, signalling strong engagement and interest in ongoing investor measures and consequences.

Though there are fewer registered bidders than this time last year, our data is telling us a more nuanced story. The crowds are smaller, but the attendees are more serious. There is stable bidder depth, even if the total volume is lower.

When a property is priced correctly and presented with transparency, the competition remains fierce. We see this play out every weekend: from deceased estates in Sefton to family homes in Perth, the results follow when the buyer believes the seller is realistic.

The tempered and rational analysis from the Ray White Economics team, and the on-the-boots engagement from our performance and digital teams, say the same thing: the market is more challenging than we’ve experienced for a few years.

However, an air of hesitation shouldn’t be mistaken for a dead market. Demand is robust because the fundamentals haven’t changed: a growing population, supply constraints, and a desire to own property.

Successful agents will build relationships, offer analysis and support, and see a quieter market as an opportunity to be communicators within their local area.

The buyers are still there. They are just being more careful about where they place their bets. In a market this complex, that isn't just a sign of hesitancy; it’s a sign of maturity.