Spring selling season kicking into gear

Property economists expect a spring market bloom to accelerate in the coming weeks as the central bank slows down its interest rate rises.

PropTrack senior economist Eleanor Creagh welcomed a return to “business as usual” from the Reserve Bank of Australia earlier this month when it raised interest rates by just 0.25 per cent to 2.6 per cent.

While the current figure is the highest since 2013, the spike was modest compared with five straight months of 50 basis point increases in the months before.

Ms Creagh said the signs of a slowdown had led to an uptick in confidence for buyers across Australia.

“Though activity will still be muted relative to last spring, the second half of spring usually brings the seasonal peak in activity.

“The RBA appears done with frontloading the tightening cycle, now slowing the pace of their hikes. This could give prospective buyers a confidence boost.

“The spring selling season may have got off to a slow start with the public holidays weighing on activity, but with sentiment finding a floor, alongside the expectation that interest rates might not climb so high and so fast, we can expect a bit of a boost in buyer confidence leading to an uptick in activity through October.

She said the increased pressure on mortgage holders means buyers have less competition on average for listings compared with recent years, creating opportunities for other market segments such as first homebuyers.

“Homeowners are likely to welcome the smaller-than-expected increase, though interest rates have still risen substantially this year and many borrowers will need to make budgetary adjustments as repayments increase.

“Some prospective buyers may welcome the less-than-expected increase in interest rates, and although home prices are falling, the balance in market conditions could make it easier to get into the market.”