The talk of the town and media is shaking up the marketplace! Our most asked question is “what’s really happening in the market?” so we thought we would answer that question here:
There have been 3 major phases of the property cycle since March 2020, when Covid hit:
- The National median value fell 1.9% between April 2020 and September 2020
- It then increased 28.6% peaking in April 2022
- It then fell by 9.1% to February 2023
This means that (and we must remember):
- National housing values were 14.8% higher in Feb 2023 than they were in March 2020
Australia has seen a rise in the total value of residential real estate to $9.3 trillion in February 2023, however this remains well below the peak of $10 trillion recorded in April 2022.
Has the increase in interest rates affected the market?
It has been almost 12 months since the first increase in interest rates and as of December 2022, 99% of mortgage holders are still paying off their loans in a timely manner. Meaning only 1% of mortgage holders aren’t paying their loans between 30 – 89 days past due. This has increased by .3% outstanding mortgages to .4% so this could be an early indication that some households are starting to struggle with rising rates.
Whilst mortgage stress is a hard thing to measure, it is predicted that we will start to see the ‘fixed-rate cliff’ pain from approximately April 2023; due to not only fixed rates expiring but from a sharp increase in loan size from April 2021.
What is happening in Hobart?
Hobart dwelling values are now -12.1% below the record high, which was in May 2022. Over the past quarter dwelling values decreased by -4.9% and in February, Hobart dwelling vales declined -1.4%.
Whilst most regions have relatively low levels of listings on the market, Greater Hobart is breaking the trend with a sustained increase in listings. This comes off the back of a long, large housing boom across Hobart in the mid – late 2010’s. For the month of February 2023, Hobart saw the highest percentage across the country of total listings on the market, up 74.3% from February 2022, but are still -16.2% below the decade average.
Days on market has blown out across Hobart with a median of 45 this is up from just 9 in February 2022.
Despite the softening, longer days on market and fewer enquiries, we are still seeing properties sell. Our office is currently seeing a strong list to sell percentage of around 86% which is up from previous months.
Although buyers tend to take a little longer to put an offer on the table (whilst often working out how much they can borrow), we are still seeing offers being made on properties approximately 6% on average over the marketing price throughout the Peterswald for property office.
*Statistics and information from CoreLogic and Australian Prudential Regulation Authority
