Despite some economic uncertainty, we can look forward to a busy spring

GUEST OBSERVATION

The last few years have seen a move away from an Australian property market determined by seasonality, to one driven by consistently high levels of demand from buyers. To most observers, the seasons of real estate all but disappeared.

However the market has recently demonstrated a return to seasonal buying behaviour, with activity dropping off over the winter months and listing activity starting to pick up before spring. This is good news for the Australian property market as we enter into the traditionally busy spring selling season, with national clearance rates now holding steady at 68%.

The Reserve Bank has also kept rates on hold at 2.5% for the twelfth consecutive month leading into spring, making it the longest period without a rate movement since 2006. This has led to some commentators expressing concern that property owners will be adversely affected should the Reserve Bank decide to lift rates upwards.

However, the buying public has been hearing a variety of messages for quite some time now which suggest that they should prepare themselves for an interest rate rise in the not too distant future. 

As a result, buyers are aware that interest rates have been held at low levels for an unprecedented period and have likely responded by budgeting against any adverse effects from future interest rate fluctuations. For those who haven’t, I would suggest speaking with a professional about budgeting for such a possibility.

Finally, the jobless rate recently reached 6.4%, sparking concern for the state of the economy as a whole. However, while many people may be understandably concerned, the unemployment rate across the country is low in comparison to other world marketplaces which are still in growth mode.

I don’t believe the Australian property market will be affected by the unemployment rate at this stage, which is likely to continue to experience modest growth through to the end of the year. However, it is worth noting that a rising unemployment rate may influence the Reserve Bank’s thinking on future interest rate decisions.

All things considered, I believe we can look forward to a busy and productive spring selling season.

Charles Tarbey is the chairman and owner of Century 21 Australasia, one of Australasia’s largest and most diverse property groups.