Spring is here!

BY GARETH KENT – Director, Preston Rowe Paterson Geelong

Australia follows the meteorological system, and hence our seasons roll over on the same date each year, so spring begins officially on September 1.

Spring is traditionally the time when our property market starts to get going, and like most things property, the reasoning is purely human, as the weather gets warmer, like lazy lizards we begin to get active.

This week, my team undertook a survey of local real estate agents across our region to get a gauge on what lies ahead this spring for the Geelong, Surf Coast and Bellarine residential property markets.

Thank you to all who participated, and here are the results:

What are the listing numbers this year compared to last year?

Interestingly, agents from different regions reported slightly different results. In some of the inner areas such as Newtown and Geelong West, agents reported stock levels quite low in comparison to last year. However, in the coastal areas of Barwon Heads, Torquay and Ocean Grove, stock levels were higher than this time last year.

Are landlords’ attitudes changing in regard to pricing?

Again, we see a divergence in experiences. The agents from Geelong urban areas reporting that landlords are presently remaining strong on pricing due to growing confidence with interest rates. Coastal agents noted landlords are “listening more to the market” or “adjusting to the market shifting”.

How strong is the demand/enquiry levels from buyers?

All agents agreed that demand is “strong” and “improving daily”, some noting that confidence from buyers is beginning to grow. One notable and very experienced director of a local agency went further to describe “demand within the price bracket of, say, $1.2 million to $2.0 million properties is strong and healthy, demand for quality homes is consistent, however properties at lower price points were experiencing poor demand”.

Will there be enough demand/enquiry to meet the increase in supply that traditionally occurs in the spring/summer selling season?

As you would expect, most agents were very optimistic suggesting that demand would either outstrip supply or remain competitive. One agent noted “we are seeing 2020 conditions”, another noted that there is a “high chance that stock levels will continue to rise sharply and it’s likely that demand will not keep pace”. The last comment from one of the towns most experienced agents.

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The answers to our short survey are quite revealing. The coastal markets experienced the biggest increase in demand, and consequently price rises during covid, with hybrid working environments allowing people to move to the coast permanently. There does seem to be a notable migration back to the cities now that COVID is over, and things are changing back to a pre-covid normal – hence the more conservative responses from the coastal agents.

It is also interesting to hear that landlords, in the most part, remain confident in the asking prices with very little evidence of forced sales being reported. I predict this is likely to change a little as borrowers and banks revise their lending terms over the next few months. The number of people “encouraged” to sell by their bank, may add to the natural stock levels of spring.

Will demand keep up with supply is the big question, if not then there will be buying opportunities for savvy investors. I think for anybody considering entering the property market, now may be a very opportune moment. And they should take heart that, property prices across our region have kept rising, despite 12 interest rate increases, high inflation and reduced borrowing capacity.

From a borrowing perspective nearly all economists have now revised their predictions on rates, Bill Evans from Westpac, addressing the Geelong Chamber of Commerce Breakfast crowd last week, predicted that we had finally hit the peak and rates would likely remain on hold for the remainder of 2023 and 2024 with some easing from September 2024.

I hope everyone has a great spring. See you at the Cup!