Aspiring home buyers are swarming into open homes weeks before the market reopens from the holiday break, in an early sign of renewed confidence amid expectations of interest rate cuts later this year, property insiders say.
Sydney-based first-home buyer and buyer’s agent Perry Preziusi is among those looking to get in before competition heats up.
Sydneysider Perry Preziusi is aiming to buy before March to get ahead of the potential surge in home buyers later this year. Louise Kennerley
“I want to buy before March because I think more buyers will return to the market after the holidays,” he said.
“I think if interest rates would drop later this year, this would bring back a lot of buyers, so now is a good time to get into the market before that happens.
“I’m looking to buy in the inner west or possibly Newcastle, depending on where I could get better value for my $700,000 pre-approved budget. Newcastle looks promising because I could relocate there and potentially get a bigger property.”
Luke Harrison, sales executive with Ray White Quakers Hill, said open homes had been packed since the start of the year.
“We listed over 45 properties on Christmas Eve even as the market slowed down to get ahead of the curve,” he said.
“We’ve conducted a couple of open homes already this year and all those properties have been jam-packed with people who were serious about buying. There were a lot of fresh buyers in the market, which is really encouraging.
“I think people feel there’s a bit more certainty with the market and that interest rates are not likely to go much higher. This gives people more confidence to make bigger decisions such as selling or buying. Last year, people were withholding a little bit. That seems to be gone.”
Sydney-based buyer’s agent Amanda Gould, of HighSpec Properties, said she was surprised to see large crowds at open homes at this time of the year.
“I went to my first open on the first Saturday of this year, and it was packed. There were at least 30 groups inspecting the property. That’s a lot for a holiday period.”
Jack Henderson, buyer’s agent with Henderson Advocacy based in Sydney, said expectations of rate cuts had fuelled optimism among buyers.
“We’ve been signing up one client a day, so I think buyers are more optimistic this year compared to the previous year when interest rates were going up,” he said.
“People are expecting rates to fall, so they are more bullish. I think it will be a more competitive buying environment this year as the masses return to the market.”
Sydney home values climbed by 11.1 per cent last year, but the rate of growth has slowed dramatically in the past six months, from a monthly growth of 1.8 per cent last May to an increase of just 0.2 per cent in December according to CoreLogic.
However, there are early signs prices have started to pick up. Over the past four weeks ended January 14, Sydney home values lifted by 0.3 per cent.
Cate Bakos, a Melbourne-based buyer’s agent, said talks of interest rate cuts had also ignited buyer activity in the city.
“I think there’s an air of optimism because there’s so much chatter about interest rates being at the top of this cycle and potentially reducing this year,” she said.
“A lot of people remember just how fast the market rose in 2021 when interest rates were falling, and many felt that they didn’t want to get caught in that again by waiting it out. So, anecdotally, I think people are organising pre-approvals and getting ready to buy.”
Melbourne selling agent and auctioneer Chauntel Considine, of Jellis Craig Moonee Valley & Kensington, said she was not expecting to see so many buyers so active this early in the season.
“It’s quite surprising to see 40 to 50 groups through our open homes, which is remarkable, and it’s something we haven’t seen last year,” she said.
In Brisbane, buyers of entry-level properties were more active this year compared with the same period last year, said Zoran Solano, buyer’s agent with Hot Property Buyers Agency.
“Every inspection I’m going to at the moment has been teeming with buyers, especially for townhouses and units,” he said. “I think there’s a fair bit of a fear of missing out creeping in among some buyers because of low supply.”
Nerida Conisbee, chief economist at Ray White, said the renewed confidence could fuel stronger price increases this year compared with a year ago.
“I think it’s highly likely that the 10 per cent price growth last year will continue this year and could even be stronger if we see rate cuts,” she said.
“Not only will we have potentially cheap finance, we also have continued shortage of new homes because it’s still so expensive to build, and migration levels are still high. So there’s still a lot of unmet demand out there.”
So far, national search volumes over the first 10 days of 2024 lifted 2.2 higher compared with the same period last year, according to
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