‘Buyers, don’t rush’: Property expert tips market to get worse

A prominent property expert has warned the “dire straits” housing conditions are about to get worse with a flood of home listings expected to hit the market in coming weeks and a rate rise tipped in August.

It comes as the number of homes selling under the hammer continues to slump, with the auction clearance rate in Queensland plummeting to just 26 per cent this week as market uncertainty continues to spook buyers.

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Brisbane’s auction clearance rate has slumped to its second lowest level this year.

Of the 213 auction results obtained by PropTrack, only 41 properties sold at auction in the past week across the state, while 36 were withdrawn and 121 were passed in.

The other states are holding up better, with the auction success rate sitting at 44 per cent in New South Wales and 51 per cent in Victoria.

SQM Research founder Louis Christopher has told his social media followers that there was “100 per cent certainty listings are about to rise within the next two to three weeks”.

“And 40 per cent (?) chance of another rate rise on the next RBA meeting.”

SQM Research founder Louis Christopher. Picture – Supplied.

Mr Christopher said there was no need for buyers to rush into the current market, which was in “dire straits”.

PropTrack senior economist Angus Moore said the number of new listings hitting the Brisbane market over the past month was up 22 per cent compared to the same time last year.

“That’s not unique to Brisbane; Perth and Adelaide have seen similar increases, but the same has not been as true in Sydney and Melbourne,” Mr Moore said.

“The investor share of sales has increased in recent months, though that’s a typical feature during winter. It’s probably still too soon to tell if we’re seeing investors sell post-budget. But that will be something to keep an eye on as we head in to spring.”

Home prices in Brisbane have started falling for the first time in more than three years. Photographer: Liam Kidston.

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PropTrack economist Megan Lieu said she did not think there would be a “massive decline” in property prices.

“How interest rates fare over the coming months is going to have an impact, and we haven’t really seen the full effect of the budget changes yet, but I think we are expecting price growth to be slower than what we have seen over the past few years,” she said.

“It’s just slowing growth, and if interest rates hold or fall next year, we could see that reverse again and we’ll see some price growth, but probably not as strong as the most recent years.”

Reserve Bank of Australia’s Governor Michele Bullock. The RBA board is due to meet again on August 10 and 11. Picture: Christian Gilles.

But Brisbane buyer’s agent Sam Hunter said buyers should not take too much notice of weekly auction clearance numbers.

“If the monthly market price data lags, then weekly auction data leads,” he said. “And while it’s a great sign that there’s more fear of paying too much than fear of missing out, too many people see a low clearance rate and assume the market is falling apart.

“A property that doesn’t sell under the hammer isn’t a failed sale. The reality is that investors have exited the market since the budget, and the mums, dads and first homebuyers are taking longer to find the confidence they need to buy, meaning they’re far less willing to bid unconditionally.

“In Brisbane at least, circa 80 per cent of properties that go to auction and don’t sell are under contract two weeks later. In a market trending down, a lot of people need the comfort of a finance clause to actually sign a contract.”

The Reserve Bank is due to meet again on August 10 and 11.