Heat coming out of property market as buyers push back

The heat may be starting to leave the scorching property market as buyers begin to baulk at sky-high prices.

General manager of Cohen Handler Queensland, Jordan Navybox, says the heat is leaving the property market as buyers baulk at soaring prices. Picture: Dan Peled

Buyers are in a stand-off with sellers due to cooling conditions and the threat of interest rate hikes forcing the dynamics of the housing market to change and leading to lower sales numbers.

Price growth has slowed to 2.08 per cent nationally through the first four months of the year but sellers are still controlling the market. But unlike last year when the fear of missing out was driving swift deal making, a rise in the number of new listings and less competition has allowed buyers to take their time and have more negotiating power.

In Brisbane, buyers agent Jordan Navybox, the Queensland managing director of the national agency Cohen Handler, has secured several strong deals in the river city's affluent inner-city, some below suburb medians.

“Some of the heat has definitely left the market,” he said.

“We’ve picked-up some great deals because sellers have been uncertain about the future and will take a cheaper price to get the cash.”

Sales numbers started the year very strongly, with more sales in January and February 2022 than the same time last year, according to property researcher PropTrack.

The data firm’s director of economic research, Cameron Kusher, said activity had eased with activity down through March and April but still elevated on pre-boom figures.

“We are a way off being a buyers market but sellers do need to rein in their expectations, this is a normal occurrence,” he said.

“There has also been a pullback in demand at the same time as we’ve seen higher supply of new stock coming to the market, which should also contribute to slowing sales activity moving forward.”

Tracy Pugh and her family have bought in the affluent Brisbane suburb of Clayfield. Photo: Dan Peled

Tracy Pugh and her family moved from San Francisco to Brisbane in January. They were warned by a friend that buying a house would not be an easy process, despite being open to anything from a complete renovation job to a turnkey property.

With the help of Mr Navybox, they recently secured a home in the leafy suburb of Clayfield for $2.8m. But Ms Pugh describes whole process as a rollercoaster.

“We tried to get it off-market, but it was owned by a wealthy Sydney investor who knew he had the golden egg and wanted to offload before interest rates rose,” she said. “I couldn’t even go to the auction, I would’ve had a heart attack.”

Not every property is experiencing less demand.

Melbourne-based president of the national Real Estate Buyers Agents Association Cate Bakos said there was clearly greater competition for A-grade homes, categorised by attractive locations and orientations with a good floor plan with bonus points for a recent renovation.

“We haven’t got the capital gains at 2 per cent per month like last year,” she said.

“Buyers know they can take their time and it’s not costing them. Vendors are now starting to get their heads around the fact the market has changed.”

Ms Bakos said that there was a large portion of “excitable but not strongly motivated” sellers who were being opportunistic and would withdraw if offers fell short of expectations.

“It leads to a stalemate and it’s a waste of everyone’s time,” she said.

Ms Pugh knew how lucky they were. “We did get lucky in the sense that in desirable suburbs, you will still be paying a premium,” she said.

Mr Kusher said he expected the next round of property data to show a small rebound in sales through May compared to April, which was disrupted by several public holidays and long weekends.

PropTrack will release its May price data on Wednesday.