Is now the time to put your home on the market?

Written by in Selling on August 23, 2019

August/September continues to be one of the busiest periods in real estate, with seeing the greatest proportion of its yearly listings during the spring market. In an effort to time a sale perfectly, many vendors begin conversations with their agents well before this peak period of the market, making late August one of the busiest times of the year.

While there are strong arguments for selling your home during any season (i.e. a quieter winter can benefit many eager buyers who are ready to brave the elements, while autumn can see a rush of properties entering the market in time to sell before winter), spring remains the busiest period. There is no reason to expect this to be different in 2019, with certain market conditions indicating that now might be a strong time to put your home on the market.

In late May this year, the Australian Prudential Regulation Authority loosened home loan rules in an effort to incentivise both lenders and home buyers.

Data from the Australian Bureau of Statistics has revealed that the number of owner-occupied finance commitments decreased by 0.5 per cent in May this year, which was the twenty-first consecutive month of decreases and the lowest since August 2012. Investment housing commitments is shown to be at its lowest level since March 2009.

Following this tightening of lending, much of which came as a result of the Royal Commission into the financial sector and stricter regulations for APRA in regards to interest-only lending, APRA acted in late May to remove the requirement of lenders to apply a ‘stress test’ for potential mortgage holders. This required lenders to establish if lendees were capable of affording a 7 per cent interest rate on their mortgage repayments.

With the Reserve Bank of Australia cutting the cash rate to a historic low of 1.00 per cent in July and with the rate of property value declines in the major markets showing signs of not only slowing down but reversing, there is a strong argument for vendors acting quickly to make the most of an expected increase in buyer activity in spring.

The continuing decline in financing commitments recorded by the ABS in May was prior to APRA’s loosening of lending stress test requirements and was also during a federal election month, which would have had an impact on buyer sentiment and uncertainty. These factors seem to have all worked in unison to begin shifting buyer behaviour and the market in general, as revealed in July housing value figures.

Corelogic data reveals that July saw a 0.2 per cent decline in national housing values, the smallest month-on-month decline seen since March 2018. In terms of the country’s largest markets, and those which saw the largest percentage falls over 2018, Sydney values were .01 per cent higher month-on-month and Melbourne values .02 per cent higher. While small, these were the first positively inclined month-on-month results since either market peaked in 2017.

In Melbourne, while many suburbs across the city continue to see some decline in housing values, there are a number of areas where falls have not only leveled out but are showing signs of growth again.

According to data, the median sale price for houses in Brighton fell by over 13 per cent from April to June this year to $2,134,000. This was most likely due to uncertainty during the federal election and a decline in activity during winter. This has shifted now and median sale prices in the area have increased to $2,200,000. Since falling by 31 per cent to $1,275,000 as recorded in May this year, median sale prices for houses in South Yarra have begun to climb again, reaching $1,302,500 in July. Carlton has also seen housing value declines cease and return to positive numbers, while suburbs like Fitzroy and Ascot Vale have seen declines slow to a crawl.

In Sydney, median sale prices have continued to fall in many innercity areas, with realestateview data showing inner west areas like Erskineville have remained relatively flat until winter, where median sale prices for houses fell 7 per cent from May to July. Lewisham has seen a similar short term fall over winter, declining by 3 per cent from May to July. House prices in Marrickville have sat around a median of $1.3 million since December last year before falling to a median of $1,260,000 in June. This has reversed and returned to just shy of $1.3 million again in July. Since a median sale price in August 2018 of $3,250,000, houses in Manly declined 28 per cent to a low of $2,325,000 in June. July saw this decline reverse and begin to show signs of growth, with a 3 per cent increase.