Chapter 1: What is the main topic discussed in this episode?
It's The Real Estate Podcast, brought to you by Ray White, the largest real estate and property group in Australasia. And welcome to another episode of The Real Estate Podcast, available on iHeartRadio, also Google and Apple Podcasts, or wherever you get your podcast from. Well, it must be Friday because coming up, we've got another episode from the podcast series, Let's Talk Property.
And we're going to be discussing this all-important question, is the property market cooling? To call the property market gains in 2021 spectacular somehow just doesn't do it justice. It's beyond spectacular, stunning, amazing or any other superlative you want to throw at the last 12 months with gains and rises across the property spectrum in Australia.
But now, as unprecedented 2021 was, we are in a different territory. 2022 is a new year and there are different considerations to take into account. So what are some of the key signals that would demonstrate to you and I that the market might be starting to cool? And more importantly, what does that mean for you, the buyer? Should you sit and wait, or is this an opportune time?
So to help us understand this better, we're joined by Rich Harvey, buyer's agent and CEO from propertybuyer.com.au. G'day, Rich. Welcome back to the Real Estate Podcast. Thank you, Craig. Great to be on the show again. Well, first, we've got to make some sort of comment about the rains, talking about unprecedented property prices. Oh, it's just been unbelievable.
And look, our hearts go out to those people in Brisbane and northern New South Wales, particularly Lismore, that have really suffered the worst flood since 1954. We've heard that the floodwaters have completely inundated the town. And also now there's warnings out for Ballina, some of the surrounding regions. So, yeah, look, we're really feeling for our colleagues up there.
And having a look the other day at Brisbane and the CBD and just what was going on, it's just unbelievable to see it that high. Oh, incredible, yeah. Well, they're saying that the last flood was, the major one was 2011, and the flood didn't get quite as high, but it's more widespread. So they're saying it didn't do quite as much damage, but it's just got further and further afield.
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Chapter 2: Is the property market cooling in Sydney, Melbourne, and Brisbane?
But it's pretty dramatic to see, you know, pontoons and damaged boats floating down the Brisbane River and all the chaos that's caused to all the residents there. Well, may it stop and may it stop fast. Now, we've got a really great subject today. So first question that I want to ask you is what are you seeing happening in the property market right now in Sydney, Melbourne and Brisbane?
And with your experience, is there any sign of this cooling? Great question. Look, we're not seeing any super tangible evidence of the market cooling. There's been a lot of talk of potential interest rate rises at some point this year, which supposedly is supposed to deter buyers right now. But what we're seeing on the ground is that there's still very strong demand for high quality property.
B and C grade properties or properties on a busy road, that's certainly taken a hit. We're still seeing good numbers at open houses and auctions. Look, in Sydney, we're seeing good numbers turning up, but that frenetic pace of bidding at auctions and And that crazy sort of buyers scrambling over each other to secure a property isn't there this year.
It's a bit more of a normalised market because we're starting to see listing volumes rise. So buyers have got a bit more choice. And price guides used to be a bit of a joke. You know, there was a joke that there was... you know, a price guide is just a suggestion. And what was happening last year is the end sale result was going from anywhere from 10 to 20% above the guide.
But we're starting to see now that the guides are a bit more accurate and properties are transacting closer to the guide price. In Melbourne, we're still seeing really strong demand. We haven't seen any significant signs of any reductions yet. That market's holding very steady and there's still a very competitive buying arrangement. In Brisbane, it's still very much a hot market.
Definitely no signs of cooling there. You know, there's up to 50, 80 groups, you know, trying to get through some properties. It's even like a mini traffic jam in the streets sometimes. So Craig, the prices are very much still rising in the Brisbane market where there's still high demand from both investors and owner occupiers. And that's coming from a lot of interstate migration.
So I think in summary, you can't typecast the market by just one cliche answer and saying the market's hot or cool or warm. It's very much a city by city and almost suburb by suburb basis that you've got to assess the market at. And what are the key indicators that you look for to show that a market is actually cooling? A couple of things we'd look for.
I'd be looking for a trending down of median house price growth. We've had massive monthly increases for the last 18 months. So we're going to start, or we should start to see an indicator of median prices starting to trend downward or even go to slightly negative territory. We're going to see days on market. So the length of the sale will be increasing.
Auction clearance rates will trend down from their 80% level down to sort of 70s or even 60% at some point if it gets very cool. The number of bidders, obviously, and people attending open homes will drop off. You won't see that a lot of reports about over-reserved prices in the media all the time.
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