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Today’s read time: 4 minutes, 14 seconds.

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OPINION

How interest rates have shaped buyer and seller behaviour

As the Reserve Bank of Australia (RBA) meets to review monetary policy, the outlook for immediate interest rate cuts remains uncertain.

While 2024 was filled with speculation about potential reductions, consensus has shifted, with many experts predicting that any rate drops won’t come until 2025.

Real estate leaders, including John Bongiorno from Marshall White Group in Victoria and Thomas McGlynn from BresicWhitney in NSW, share their insights on how the market and buyer behaviour have adapted to the prolonged high rates.

Adaptation to prolonged high rates

John Bongiorno believes the market has settled into the current financial climate, noting that both buyers and sellers are continuing to participate actively.

“Everyone’s buying. Rates have been stable for some time now, and most people expect them to remain that way or possibly come down. No one is forecasting an increase,” he said.

No such thing as the perfect time to buy

Thomas McGlynn pointed out that while interest rate hikes did impact the market, their effects have only recently started to manifest, particularly in combination with inflation and cost-of-living pressures. “Interest rates have played a part in shaping the property market, both for buyers and sellers.

“However, it didn’t have as quick an impact as many predicted.” He also stressed the importance of encouraging clients to buy sooner rather than later, saying, “The only way you know when the market’s at its bottom is when it’s already on the way back up.”

Shift in buyer-seller dynamics

Both leaders agreed that the property market is experiencing a shift. Mr McGlynn noted: “There was a big gap between what buyers felt properties were worth and what sellers expected, but that gap has narrowed.” He added that auction clearance rates may be down, but buyer interest is still present. “Many of the properties passing in at auction aren’t doing so without any interest; it’s often a matter of price expectations,” he said.

ICYMI, yesterday we discussed why younger tenants may be your best clients yet

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SMART SNIPPETS

Building permits surge nationwide
Housing construction in Australia is showing impressive recovery signs, hitting a two-year high in September 2024. With interest rates remaining stable and strong population growth, detached house approvals jumped 6.1% to nearly 10,000 homes. Melbourne is leading the charge with twice as many approvals as Sydney.

REIA welcomes new CEO
Australia's peak real estate body has appointed Scott Rollason as its new CEO. Coming from Family Day Care Australia, Mr Rollason brings a unique blend of legal expertise and association management experience to the role. His background in government relations and legislative matters positions him well to lead the organisation through its next chapter.

Americans turn to Canadian real estate amidst election tensions
As the US presidential election kicks into top gear, American interest in Canadian real estate is rising. Data from Royal LePage shows a 104% increase in US website visits before the first Biden-Trump debate and peaking even further since.

“It’s not surprising in this incredibly divisive American presidential election that they are attracted, at least emotionally, to the concept of getting away from it all,” said Phil Soper, CEO of Royal LePage.

Build-to-Rent legislation offers hope for renters
Half of Australian renters feel they have no choice but to keep renting, with 40% seeing homeownership as out of reach in the next five years. The industry claims new build-to-rent legislation could deliver 105,000 new homes over the next decade, including 10,500 affordable rentals, if passed with proposed changes.

SOUND WAVES

Auction results: a mixed bag

Australia's auction market continues to show pockets of robust competition and high bidder turnout. However, this curated listen reports on how clearance rates remain uneven, with economic factors and regional variations playing crucial roles in shaping the broader outlook.

Dive straight into the listen below or the deeper dive here.

Read the article from Elite Agent here

AGENTS ON SOCIAL

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Wishing you a productive day

Elite Agent is crewed by Mark Edwards, Catherine Nikas-Boulos, Rowan Crosby, Giverny Pringle, Charmagne Arrubio and Samantha McLean. We aim to uplift the real estate industry by delivering forward-thinking, hype-free news and education that fosters knowledge and fuels ambition.

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