“There’s nothing to suggest that we’re about to see a shift in the balance between buyer and seller. It still points to the fact that we’re seeing buyers increasingly empowered as we see [total] lists are growing in Sydney and Melbourne, ”said CoreLogic research director Tim Lawless.
“The downward seasonal trend is amplified by the fact that sellers, or homeowners, are increasingly unwilling to test the market when sales conditions become increasingly difficult.”
Prices fell 1.6 per cent in Sydney in June and 1.1 per cent in Melbourne. Incremental gains were made in the other capitals except Hobart, where they also fell.
The momentum of the historic fall is an equally aggressive series of interest rate hikes, with the market price at a maximum cash rate of around 3.5 per cent in May next year. This would make it the fastest hardening cycle in almost two decades, a serious brake on a housing market that has become increasingly debt-dependent. And as Jarden’s chief economist Carlos Cacho points out, the impact of rising mortgage costs on borrowers is proportionally greater when applied to lower interest rate levels.
“We’re probably seeing an acceleration of falls, a little faster than we expected,” Cacho said.
“The feeling of the buyers and the urgency that there has been in the market during the last year have evaporated. Buyers have a much greater sense that they have time by their side and that they can expect the right property to appear.
“No one wants to be that person who overpaid and went down 10 percent in their first year.”
For overpaying
As this year’s FOOP, the fear of overpayment, replaces last year’s FOMO, the fear of getting lost, bargain hunters are also reducing home loans.
Total home loan volumes have fallen over the past four months from a year ago (for first-time home buyers, the series of falls is now eight months), and even loan growth for investors, which in May last year doubled its monthly value. 12 months earlier, it is now slowing down.
Sydney Buyers Agent John Carew points out that for buyers of lower priced properties, who need to borrow closer to 80-90 per cent of their purchase prices, rising interest rates will affect month.
“It certainly affects market sentiment and has a disproportionate impact on people approaching the red line from where they can get funds, which is what a lot of people 35 or younger do,” he said.
Rising borrowing costs have sparked a new source of business for Julie DeBondt-Barker. Melbourne-based DeBondt-Barker, who runs a buyer’s defense agency specializing in first-time home buyers, has received 10 seller’s defense warrants over the past three months from one-bedroom apartment owners. two rooms that want to unload their properties.
“There are investors who are just pouring in,” Ms. DeBondt-Barker said.
“It looks like a lot of them are baby boomers who are deciding they should charge too now, it’s not getting better. If they had a crystal ball, they would have done it a year ago. But they say close enough is good enough. I’ll charge and I’m going to get out of it now. There’s a lot of that. “
The main market of Ms. DeBondt-Barker’s first home buyer is also cautious.
“The feeling [among] Some of the first home buyers we have is that the bank says they can borrow $ 550,000, but they don’t really want to borrow more than $ 500,000, ”he said.
“They don’t want to reach that maximum and they know that the market is getting colder, so the ball is a bit on their court. They are a little further away when they are shopping. “