26 JULY 2023
After the slowdown in the latter part of 2022, housing prices across the country rose 1.1% in June, marking a fourth straight monthly increase.
Since February, national housing values have gained 3.4%. However, the overall market remains -6.0% below peak levels recorded in April 2022. For reference, that means the median dwelling price is -$45,771 below the peak of $768,777.
When looking at regional (non-capital city) markets, including ours, prices have also climbed for four successive months, though they are up a lower 1.2%. Here in Newcastle, where the sample size is smaller, we are recording the June median house price at $875,000. This represents a slight increase from our last report, though it is still down -2.3% over the last 12 months. Keep in mind our figures will fluctuate more than national figures as the volume of homes selling is significantly smaller.
While homeowners will be happy to see prices rise, it should be noted that the June rise was fractionally lower than what we saw in May. Does this signal a shift to a slower market after recent optimism? It’s too early to tell. But it is important to stress that prices are volatile and that a continued upswing is far from guaranteed.
The competing factors at play here are increasing interest rates, growing population trends, higher weekly rents, and a lack of stock on the market. The lack of homes for sale is the most frustrating thing for agents and buyers at the moment. The number of capital city homes advertised for sale in June was -26.4% below the average for this time of the year. The combined regional areas across the country are even worse than the capital cities. Listings are now -32.9% below the previous five-year average. There are no reported figures specifically for us here in Newcastle, but we reckon those figures closely correlate here.
It is this disconnect between the available supply of homes for sale and buyer demand that has been driving housing values higher, even as interest rates have almost tripled.
Most sellers like the idea of selling when the market is booming but then struggle to find something in their price bracket. On the flip side, buyers don’t like buying when the market is contracting. Sure, they like the idea that prices have dropped but would prefer to wait a little longer until they drop further.
Despite this, right now is actually a really good time to be buying and selling. From our viewpoint, the market is nicely balanced between supply and demand. There is a calmness now that we have not witnessed for many years. Prices are meandering along, but neither buyers nor sellers are feeling cheated.
At our open homes, we are finding that a correctly priced property will most likely experience around 10-20 attendees at the first Saturday open home. And over the last two months, we have averaged 3.6 offers per property. During this time, 82% of our new listings sold within our 2-4 week goal. The vast majority of these selling close to or slightly above our advertised price range.
These ‘normal’ conditions should make for a relatively painless buying and selling experience.
But the future is still uncertain. We are noticing an uptick in market appraisal requests. Usually, this is a sign of new listings hitting the market soon. This is not unusual for this time of the year as the busy spring period approaches. But if an excess number of people decide to sell in the coming months, there is a chance that the slow and steady price growth may reverse.
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