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Market Information

Market Information

Welcome to Ray White Now, a monthly insight to provide clarity to all our customers on what is happening in the market now. If you are considering selling the following report explains how you can take advantage of the current conditions to achieve the best possible sales outcome.

Why sell now?

The main event looming on the near-term horizon that may accelerate any slow down phase is if the central bank adjusts monetary policy sooner rather than later. The Reserve Bank of Australia (RBA) has maintained the official cash rate at a record low 0.1 per cent since November 2020, in addition to its quantitative easing program that has injected more than $400 billion into the economy through the recession.

It’s clear the RBA is firmly focussed on inflation outcomes along with labour market conditions and wages growth, to guide their policy decisions. Financial markets and economists believe inflation pressures will force the RBA to start normalising rates by August, ahead of spring selling season. Higher interest rates will slow economic growth, the jobs market, and housing to keep inflation under control.

While inflation “has picked up more quickly than the RBA expected”, the central bank is not ready to conclude that inflation will remain sustainably within their 2-3 per cent target range. Uncertainty related to the war in Ukraine, rising energy costs and global supply chain disruptions are adding further complexity to the policy environment.

While the unemployment rate is trending towards the sub four per cent range, a more significant lift in wages remains the missing piece of the puzzle before the cash rate shifts higher. The RBA notes wages growth has picked up (the wage price index was up 2.3 per cent last year) and expects wages to rise further under tight labour market conditions, but the RBA anticipates growth in wages will be only gradual.

Despite the growing downside risks to the housing sector, other factors should help to offset a significant downturn. As the economy strengthens and labour markets tighten, the risks around mortgage stress or default should lessen. Open international borders will help to support demand, initially from a rental perspective, but longer term for home purchasing as well.

The number of properties for sale will also increase over 2022 which creates more choice for buyers. What we do know is that market fundamentals right now are still helping our clients who are looking to sell. Our data tells us that our sellers who choose to sell via the auction method are rewarded with a 12 per cent higher price under the hammer than if they’d accepted a prior offer.

Since the start of 2022, our group booked 4532 auctions, a 50 per cent jump on the prior year. We cleared 81 per cent of all auction stock under the hammer, with an average of 5.8 registered bidders. There’s a deep buyer pool for sellers to take advantage of right now. Our question remains, “What are you waiting for?”

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