Surge in home buying rates prompts NAB executive to deliver stark caution to potential buyers
The Australian housing market is experiencing a unique blend of challenges and opportunities, with a significant shortage of properties for sale causing a ripple effect across the nation.
In a critical state, the housing market in Perth has reached a historic low, with just 1,700 houses currently available for sale, marking the lowest level ever recorded in the city. This scarcity has pushed house prices higher, according to real estate agent Corey Adamson, who warns that the lack of supply will continue to exert pressure on the market.
On the other hand, Canberra fared the best of the bunch, with new listings declining by a modest 0.4%. Despite this, the overall decline in Australian property sales in recent weeks has been primarily attributed to a low number of new listings, which has reduced market activity and limited buying opportunities.
However, there is a silver lining. The share of new housing purchased by first home buyers has increased by 40%, marking the highest share since December 2022. This trend is indicative of a growing confidence in the market, especially among first-time buyers.
This renewed confidence is reflected in the NAB Residential Property Index, which has reached a 12-month high at +44. This index, a measure of sentiment among real estate professionals, suggests that confidence in the real estate market is now positive across the country, including in the ACT, which had been subdued since late 2022.
Denton Pugh, the NAB executive for home lending, advises potential buyers to act fast, as it could be a prime opportunity to buy a property. Pugh suggests three steps to help buyers secure their dream home: know your strategy, get pre-approved for a loan, and find the right property. However, he cautions against paying above market value, as it could create problems if the bank's valuation of the property comes in lower.
The latest index figure was driven by recent interest rate cuts and growing expectations of further easing. National house prices have risen for six consecutive months, increasing around 3% since the start of the year.
While the housing market shows signs of recovery, the scarcity of properties for sale remains a concern. In all capital cities, new listings were lower relative to the prior year, with Perth (-11.2%), Brisbane (-10.6%), Hobart (-13.5%), Darwin (-9.9%), Melbourne (-9.4%), Sydney (-5.3%), and Adelaide (-4.1%) experiencing the largest decreases.
Mr Adamson's warning reveals that the lack of supply has prompted some real estate agents to leave the industry entirely. As the housing market continues to evolve, it is essential for potential buyers to stay informed and strategic in their approach to secure their dream home.
