Homes selling faster in many suburbs, especially in more affordable areas

Homes are flying off the shelves in many suburbs despite a cooling in Australia’s property market, with buyers who are chasing more affordable options among those who still have to act fast.

New PropTrack data shows properties nationally are selling faster than a year ago and are being snapped up within days in some suburbs, even though buyers have more choice and less urgency.

While sellers remain in the driver’s seat for now, PropTrack director of economic research Cameron Kusher said the pendulum is shifting.

“The market at this point continues to favour sellers compared to buyers, however we are swinging back towards a more balanced market and depending on how high and how quickly interest rates rise, we could see the market move in favour of buyers,” Mr Kusher said.

Mr Kusher said housing markets have been strong right throughout cities and regional areas during the pandemic boom, but are now showing divergence in the time homes take to sell.

“Throughout the pandemic properties have generally been selling quickly due to the low volume of stock and the heightened demand for properties,” he said.

“More recently as stock levels have increased we have started to see certain properties in certain areas taking longer to sell due to the better balance between demand and supply.”

While noting PropTrack’s top 10 state and national lists show a lot of dispersion between the suburbs with the biggest declines and increases in days on market over the past year, Mr Kusher said lower-priced areas are typically experiencing the largest falls.

He said the areas on the lists with the largest increases in days on market tended to be suburbs that have higher median house prices than the city-wide or local area median.

“Higher-priced properties have a smaller pool of potential buyers than more affordable properties do and we also typically find as the market goes into a downturn, higher-priced properties experience larger price falls,” Mr Kusher said.

“This likely explains why it is some of the more expensive suburbs in which we are seeing the biggest increases in days on market and also explains why more affordable areas are seeing the largest falls in days on market.

“Affordability constraints certainly play a part in a slowing in more expensive properties, and coming after rapid price growth over recent years and now interest rate increases, this would explain the slowing in these markets.”

As property market activity cools, Mr Kusher expects interest rate hikes, a slowdown in price growth, and the rebalancing between supply and demand will impact selling times.

“It’s reasonable to expect that from here properties will start to take longer to sell,” he said.

“Over recent months we have seen a bit of a better balance between supply and demand so I would expect going forward we will start to see a moderate increase in days on market.”

Nationally, the time a house was listed on realestate.com.au before it sold fell to 37 days in April, compared to 51 days in April last year. The median days for units dropped to 44 from 55.

Where homes are selling the fastest

While houses in all capital cities are selling quicker than a year ago due to ongoing strong demand and low stock volumes, Hobart remains the fastest market.

The median time a house in Hobart took to sell dropped even further to 11 days in April, down from 14 days a year earlier.

Homes in several Hobart suburbs are typically selling in just over a week, while median days on market are now also at only eight or nine days in a few other spots around Australia.

“This is an incredibly short time on market and highlights both the few properties available for sale and the fact that there are many people wanting to buy in these areas, resulting in properties selling in rapid time,” Mr Kusher said.

Five Australian suburbs share the shortest days on market with a median of eight days: North Hobart and Hobart’s New Town, the Brisbane suburbs of Tingalpa and Bald Hills, and Shenton Park in Perth.

The rest of the national top 10 are suburbs where houses are selling in a median of nine days are Launceston’s Ravenswood, the outer south-west Sydney suburb of Eschol Park, Hobart’s Howrah and South Hobart, and Arana Hills in Queensland’s Moreton Bay region.

Hobart has even more suburbs sharing a nine day median – Mornington, Sandy Bay, Mount Stuart, Geilston Bay, and West Hobart.

“Hobart properties are very much in demand while at the same time the supply of properties coming to the market is very low,” Mr Kusher said.

“As a result, people are hanging out for new listings to come to the market and move to secure a contract on these properties very quickly.”

Knight Frank southern Tasmania agent Abi Freeman said the demand for inner-city suburbs such as North Hobart and New Town remains strong, but noted there has been a 30% reduction in stock levels from only six months ago.

“We are starting to see a change in buyers’ behaviour as they are becoming much more considered and slightly nervous about interest rates and the cost of living.”

Ms Freeman said another noticeable change is that buyers lack the confidence to make unconditional offers, with an increase in conditional contracts that were the exception rather than the normal a few months ago.

“I would still describe the current market as a ‘seller’s market’ however there is a change in buyer behaviours rather than a reduction in sale price.”

There are other suburbs with a fast nine-day median in Queensland – Alexandra Hills, Drewvale, Regents Park, and Battery Hill – and Sydney’s outer west (Dean Park and Glenmore Park).

“While price growth has started to slow in Queensland, it has been much more moderate than elsewhere and Queensland remains one of the nation’s hottest housing markets, so it’s no surprise properties are selling very quickly,” Mr Kusher said.

Brisbane had the biggest decline in time on market among the capitals, with its median for houses down to 28 days in April from 48 a year earlier.

Median days on market for houses fell to 27 days in Melbourne, 28 in Sydney, 36 in Canberra, 44 in Adelaide, 50 in Perth and 64 in Darwin.

Houses are typically selling within a fortnight in outer western suburbs and the Blue Mountains in Greater Sydney, outer suburbs including the Yarra Ranges in greater Melbourne, many other Queensland suburbs and Adelaide’s Seacliff Park.

“The outer suburbs of Sydney have overwhelmingly been the most in demand since the onset of the pandemic due to the lifestyle benefits, larger lot sizes and more affordable price tag, which is driving the quick rate of sale,” Mr Kusher said.

“Much like Sydney, outer suburbs in greater Melbourne have been extremely popular over recent years. Of course these areas are more affordable but have a great lifestyle offering that people are looking for.”

Units are still taking longer to sell than houses across the capital cities, with the Gold Coast suburb of Clear Island Waters having the shortest days on market for units at nine days.

Median days on market for units fell in most capitals, except for Hobart where it was unchanged at 14 days while Melbourne recorded a 5% rise to 46 days.

Faster sales in more affordable pockets

Some buyers priced out of more expensive suburbs are having to look at more affordable options, Mr Kusher said.

“Typically people aspire to live in more expensive suburbs but the reality is, particularly in a market where prices have been rising rapidly, that they can’t afford them and have to choose somewhere with a lower price point,” he said.

“The other factor is first-home buyer numbers have slowed but remain high on a historical basis and investors who also target lower-priced stock typically have been returning to the market, so those factors potentially drive more desire for more affordable properties.”

Queensland dominates the list of top 10 suburbs nationally that have recorded the largest percentage decrease in median days on market for houses over the past year.

Mr Kusher noted the Queensland locations are either regional lifestyle markets or suburbs in the west of Brisbane that also have lifestyle features such as large lot sizes.

“It really highlights the sort of properties that people have been seeking over the past few years throughout the pandemic.”

The riverside western Brisbane suburb of Fig Tree Pocket had the biggest decline nationally with an 89% drop to a median of 11 days.

Next was an 84% decline to 11 days in the small rural suburb of Jones Hill in Queensland’s Gympie region and an 83% drop to just 10 days in the rural town of Kingsthorpe, near Toowoomba.

Brett Richards is an agent at Ray White Highfields and Toowoomba Range and said Kingsthorpe is popular with a range of buyers, including families, first-home buyers and investors.

“A lot of families buy out there for the lifestyle and space for the kids,” Mr Richards said. “It’s lifestyle living. It’s a great little quiet community.”

While Kingsthorpe’s median house price has risen to $445,000, Mr Richards said it is still one of the more affordable suburbs in the Toowoomba area.

“It’s still reasonably priced and value for money with the bigger blocks.”

He said blocks typically ranged from 1100sqm to more than an acre, while there was a mix of old and new housing as well as a new subdivision of 90 one-acre blocks.

Median days on market for houses dropped by 81% in Perth’s Shenton Park (to eight days) and by 78% in Launceston’s St Leonards (10 days).

The town of Bowenfels on the outskirts of Lithgow had the biggest fall in NSW for houses, down 78% to 27 days. The small town of Campbells Creek near Castlemaine had Victoria’s biggest decline with a 72% fall to 28 days.

The Cairns suburb of Kewarra Beach had the biggest percentage drop nationally for units with an 84% decline to a median of 81 days.

Properties in some suburbs taking longer to sell

In terms of the suburbs with the biggest jumps in median days on market, Mr Kusher said the biggest movers nationally partly reflected a change from extreme lows a year ago.

“In most instances the median house prices are higher than the local area median. However, relative to pre-pandemic days on market are still low, it’s just that they are shifting higher from extremely low levels that were recorded 12 months ago.”

The coastal village of St Andrews Beach on Melbourne’s Mornington Peninsula had the largest increase in median days on market for houses nationally in percentage terms, up 175% to 22 days in April.

But most properties – particularly at the top end – were still selling much faster than that mark despite some recent slowing from the peak of the pandemic boom, according to Liza Milchman, director and principal agent at Milchman Real Estate – Sorrento.

“The minute I got something online people would be trying to put offers in without even seeing it,” Ms Milchman said.

A wave of buyers making a sea change and a limited supply of properties for sale pushed up prices on the Mornington Peninsula during the pandemic, with St Andrews Beach’s median house price surging last year. It now stands at  $1.81 million.

Ms Milchman said there was still a lot of interest in the “country beach town” despite homes being more expensive and the top end of the market was performing well, but the sense of urgency and fear of missing out had eased.

She attributed a temporary slowing in the local market to a pre-election slowdown and the increase in interest rates affecting particular price points, noting it took several weeks for her cheapest listing at $1.3 million to attract a buyer.

“But I think it’s going to bounce back pretty quickly.”

The biggest percentage increases in median days on market in NSW were recorded in outer suburbs in Sydney’s south west, topped by a 174% increase to 96 days in Canley Vale.

Mr Kusher said the NSW 10 list highlighted how high prices have risen.

“A lot of these suburbs were previously viewed as quite affordable and prices are now pushing or in excess of $1 million, which has probably pushed them out of the realms of possibility for their typical buyers.”

Mr Kusher said most of the areas where median days on market for units had recorded the largest increases tended to be focused on the middle and outer ring of cities and were likely to be older unit stock.

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