The price brackets househunters are looking … and aren’t on realestate.com.au

Househunters search habits are changing on the back of price growths and interest rate rises. Find out what buyers are looking for, and which price brackets have seen a decline in online searches.

The amount home buyers are looking to spend has changed dramatically over the past few years, but not all parts of the property market have been equally impacted.

When an individual searches to buy property on realestate.com.au, they have the option to include a maximum price threshold. Looking at price searches is helpful because they can act as a lead indicator preceding what happens in market.

Realestate.com.au economist Anne Flaherty

Back in December 2019, 10 per cent of those looking to buy in Greater Adelaide were searching for properties priced at above $1 million. Cut to March 2020 and the Reserve Bank’s decision to slash interest rates pushed the share of $1 million plus searches up to 14 per cent.

What followed was one of the fastest episodes of price growth in Australia’s history.

Increased borrowing power, and assurances by the Reserve Bank that they would not increase interest rates until at least 2023, enabled and encouraged property seekers to buy at a higher level.

By early 2022, the share of all $1 million plus buy searches had surpassed 25 per cent in Greater Adelaide, peaking at 29 per cent in June. But with interest rates now at the highest level since 2015, buyers are more constrained, and this is starting to show up in searches.

Among those looking to buy houses in Greater Adelaide, the change has been most notable at the $1.5 million plus level.

Some brackets are up.

And some are down …

Between June and July, properties priced above $1.5 million saw a decline in the share of searches. At the same time, there was a corresponding rise in the share of searches below this level, particularly in the sub $750,000 category.

The same trend holds true among those searching to buy units, where there has been a shift in searches away from expensive properties in favour of more affordable properties.

These changing search preferences have recently begun to flow through into decreasing median prices, a trend that is likely to continue through to the end of the year at least.