Property investors, vendors eyeing off crucial 2023 spring selling season

Spring 2023 is shaping up as a significant tussle between an increased numbers of property sellers bringing stock to the market and buyers emerging looking for these additional properties.

Whether property prices rise or fall will be determined by how this balances out.

When buying an investment property, you will want to make sure you buy the right property and at the right price, but sometimes this means you also need to buy at the right time.

When we are referring to the right time we aren’t talking about timing when the market hits its peak or trough, because no one has a crystal ball. However, seasonality can play a role on property prices and this coming spring might prove to have some surprises in store for many buyers.

The warmer weather brings out more buyers into home opens and also attracts sellers that have been holding tightly onto their properties to list for sale.

When is the best time to buy property?

Sellers prefer to list their homes in spring months because the properties can be shown in their best light, as spring is when the gardens and lawns look their best, there’s more daylight hours, and buyers are in a hurry to buy a property before the year is out.

Sellers are expecting that more buyers will enter the market so they can cast their net wide and get the best price for their property if buyers want to compete for their property.

On the flip side, for buyers, when this additional stock enters the market there will be more choice and the impact this will have on prices will be determined by whether the additional stock meets, or is in excess, of the demand from buyers.

There is no exact science around the best time to buy, and this will be different for every individual. No one can predict the market accurately and you cannot time when the property markets will reach their peak.

Even the experts wrongly predicted that property would take a 20 per cent-plus dive during the pandemic years but in the end the property markets proved their resilience.

The best time to buy property as an investor is when you can afford to, and it is important to buy the right property to meet your individual needs, which we call your personal investment strategy.

Interest rates may shape spring property market

This year, interest rates are certainly going to play a big role in determining spring time property prices.

At the start of 2023, we witnessed a lot of uncertainty around interest rates, with buyers nervous about what their cost to borrow would really be.

The direct result of interest rate rises is that buyers hold off entering into the market until they regain their confidence.

How the Reserve Bank of Australia (RBA) determines interest rates for the remainder of the year will determine buyer confidence in the market. If the RBA keep interest rates on hold, we are likely to see strong demand for properties towards the end of 2023 and this will put property prices on an upward trajectory.

If interest rates end up going through one or two more rises before the end of the year, I doubt this will stop buyers entering the market, as many buyers recognise that interest rates are likely to soon reach their peak.

Spring 2023 real estate market outlook

What we are predicting to see:

• More stock will come onto the market as sellers are ready with the mindset of “sell before Christmas”.
• More buyers will emerge onto the market, both locally and through the increased international migration, and although there will also be more stock, the stock is likely to sell faster, as typically the days on market are shorter in the warmer months. Investors will need to be quick on a good deal, and home buyers will need to put an offer on fast to secure a premium property.
• We are expecting more auction campaigns, as is typical in spring because it is nicer weather to be outside enjoying the sunshine and spring auctions have a lot more excitement, as locals who are walking by often stop to watch all the action. Sellers hope this excitement will push prices up.
• When there is more stock and choice, there is less pressure on prices and house prices tend to flatten when supply can cater for demand.

Population pressures will drive housing demand and property prices higher, which we have already started to see with the influx of international students and in light of the recent lifting of temporary and permanent visa grants to alleviate skills shortages.

We have already seen this migration putting additional pressure on the existing rental crisis.

A Domain report also attributes pressure on property prices to the construction industry, where “higher construction costs have created an industry-wide slowdown and could eventually feed into higher property prices.”

With Sydney being closely watched as the nation’s most expensive capital city, the Domain report predicts, “Sydney house prices will be at a new record high by the end of next financial year if the forecast growth of 6 per cent to 9 per cent eventuates.”