Will Australia’s real estate market crash? Tom Panos opinion

Our overheated property market has begun to cool as listings grow and FOMO falls, so what’s next for buyers and sellers with interest rates expected to rise?

OPINION

Six weeks ago, when the market was red hot, I wrote an opinion piece indicating that November and December would be the best buying opportunities we’ve seen for some time.

This has now crystallised.

When the lockdowns were lifted, record numbers of listings have been coming onto the market and buyers now have lots of choice.

When you combine an increase of supply with the recent changes from The Australian Prudential Regulation Authority (APRA), we may see interest rate increase in 2022.

The market is still good. It’s just gone from ‘red-hot’ to just ‘hot’.

The million-dollar question is, will we have a correction?

Or worse still, will the market crash?

The real estate market has been red hot – Tom Panos in action. Picture: John Appleyard

WHY AUSTRALIA’S REAL ESTATE MARKET WON’T CRASH

Below are the reasons why I believe the real estate market won’t collapse:

1. Interest rates will still be low

Interest rates are still very low, even if there are increases to rates.

Rates are so low that the deal still stacks up that borrowing and buying still makes a lot of commercial sense.

2. Overseas buyers

Buyers from overseas that have money are re-entering Australia in large numbers as international borders open and Australia remains one of the most liveable countries in the world.

3. Covid clarity – people are on the move.

Covid showed that the home is a very important aspect of people’s lives. Having a great place to live and a desirable suburb to live in, has become more important than ever. Buyers are still lining up in droves inspecting real estate. They’re just not getting as carried away as they used to be.

There are still plenty of buyers out there. Picture: Newscorp Sunday Telegraph / Gaye Gerard

4. Too many buyers

Even though the depth of buyers has reduced, there are still enough buyers to ensure a good result is achieved. Last weekend, the number of registered buyers at my auctions, averaged at five instead of 10. With this amount of people bidding at an auction, great results are still being achieved.

THE HOMES WHERE PRICES MAY BE AFFECTED

However, the one thing that is becoming obvious is this: “C-Grade” properties that don’t’ tick all the boxes may be impacted with slightly lower selling figures.

For example, if you have a property that has an irregular sized block of blank, or is located on a very busy road, you may find that it’ll take longer to sell and/or the price will be slightly discounted to get it sold today versus two months ago.

SELL NOW OR WAIT

Finally, let’s address the issue of whether you should sell now or wait until the new year.

My recommendation is, that you engage an agent prior to Christmas to take advantage of the holiday period where record numbers of people visit realestate.com.au as they have more spare time.

List before the Christmas to give potential buyers a chance to see your home for sale over the holiday break. Picture: Newscorp Sunday Telegraph / Gaye Gerard

Don’t fall into the trap of coming onto the market after Australia Day – which is what most people do – because then, you’re on the market during a high-supply period.

You are far better off having your property available for an agent to show during December 2021 and early January 2022 to take advantage of the high number of buyers who are searching during this time.