Only a year ago, homebuyers wanting to get into the market were panicking and in a race. Could they secure a home before prices went up even more? Was there any ceiling on how high prices could go?

Fast forward to now and it seems that buyers could be back in charge, particularly if they are owner occupiers who can get lower interest loans than property investors.

Six interest rate rises from the Reserve Bank of Australia have taken the wind out of the market, and new data from the Domain property group this week shows that home owners in Brisbane, Darwin, Perth Melbourne and Sydney are discounting their asking prices by amounts not seen since before the boom.

The Domain data shows that the average reduction in the asking price of a house in Sydney is now the highest of any capital at 7.8%. Given that the median house price in Sydney is now at $1.55 million, this is like cutting more than $120,000 off the price.

The Domain research pinpoints the Melbourne suburb of Stonnington East and Brisbane’s Sherwood-Indooroopilly as other areas where this phenomenon is also acute.

Now, instead of being in a race to buy, buyers can take their time and have a good look knowing that prices are on their way down and are likely to be in that part of a cycle for some time.

Investment bank UBS reckons that even though they are falling, Sydney property prices are still “highly overvalued” and after surging 30% in 2020 and 2021 there could be “peak to trough” fall of as much as 20%.

So far, Sydney prices have fallen 9% from their peak, which means that if UBS are right they could fall another 10% or so.

For homebuyers, this opens up a new world of opportunity, especially if they have a decent deposit saved.

Research from SQM shows that in key markets such as Melbourne the number of listings is gradually increasing, perhaps as a result of mortgage stress.

On the other side of the market, it is reportedly more difficult than ever to find a decent rental in a capital city market as supply stays low and rents increase.

All this means that the factors favoring buyers are aligning but with one caveat, and that is increased interest rates.

But while the RBA has signaled that more rates hikes are on their way, there is also a feeling that the central bank may be nearing the end of its tightening cycle.

This could also be an argument for buying now, before rates hit their peak and while prices are on their way down.

As ever, the protection against rate hikes is to maximise a deposit, which could mean a savings frenzy, the sale of any non-essential assets which might be worth anything, a new side hustle, or a conversation with the Bank of Mum and Dad. Or all of these.

Homebuyers, particularly those looking for their first home, have been up against it for a while now.

The signs are there that this tide may have turned, presenting a rare opportunity which those who can possibly do so should seize as best they can.


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