The property market dynamics in the Southern Highlands are indeed fascinating. Rising interest rates significantly impact borrowing costs, affecting buyer affordability, confidence, and demand. This often leads to a cooling effect on house prices in certain price brackets. However, it’s interesting to observe the behaviour of cash buyers in the Highlands, as their presence adds another layer of complexity to the market.
Supply and demand are also crucial factors. When the supply of homes exceeds demand, prices tend to fall, and vice versa. Additionally, economic conditions, employment rates, and consumer confidence can influence market trends. Predicting future patterns involves analysing these variables along with historical data. Here, we have compiled specific data and analysis on these aspects for the Southern Highlands.
SUPPLY & DEMAND:
This is a tricky one.
We know there are currently 724 homes listed for sale in the Southern Highlands online. However, what you might not realise is that many homes are unlisted, off-market, or about to be listed. Therefore, the online statistics only tell part of the story.
Demand becomes evident when there are numerous enquiries and many parties attending the open homes, days on market reduce, and less stock is available. Over the past 12 months, we haven’t seen huge demand for buying properties due to the abundance of stock, and less urgent demand.
CURRENT PUBLICLY LISTED SOUTHERN HIGHLANDS STOCK QUANTITIES:
Up to $1m= 215 homes
$1-2m =282
$2-3m =129
$3.4m =53
$4-$5m = 22
$5-6m =11
Over $6m = 41
Source: realestate.com.au
We’ve seen a decrease in online stock across most sectors, except for an increase in listings above $5 million compared to last month. There have been price reductions in certain areas as days on market are increasing, and agents are eager to close out their listings before their 90-day agency agreements expire. Many listings have expired recently, providing competitor agents the opportunity to relist them.
This time last year, vendors were keen to sell sooner rather than later to capitalise on the remaining value in the current market before the predicted drop occurred. That property market drop has certainly happened, creating a great opportunity for buyers to secure properties in the Highlands at sometimes pre-pandemic prices. Unfortunately, in our experience, at least 60% of properties listed in the last 12 months have been due to marriage breakdowns.
Interest rate hikes and limited borrowing capacity have played a role in the market dynamics. Even cash buyers are trying to get a bargain. However, we observe that buyers are becoming more selective, and agents often struggle to draw offers from them. Transactions are still taking place but at a slower rate than hoped. As Winter takes hold, uncertainty grows stronger. Properties are remaining unsold, and vendors are withdrawing their homes from the market, waiting until Spring. However, typically, those vendors then become part of the “Spring Catalogue”, along with others waiting for their gardens to look attractive. This leads to an increase supply in an already unstable market, likely leading to regional prices remaining fairly stable. Closing the gap between vendor expectations and buyer willingness to make strong offers has been a local pattern for the past 12 months.
The most recent report from the Melbourne Institute of Applied Economic and Social Research stated, “Housing-related sentiment showed a further widening in the already stark disconnect between weak buyer sentiment and upbeat price expectations… The ‘time to buy a dwelling’ index fell 4.8% to 72.8, returning to recent lows and in the bottom 5% of readings recorded since the mid-1970s.” Locally, buyer sentiment has been weak, but price expectations are aligning with the market through notable “price adjustments”, where property guide prices are adjusted down after several weeks on the market.
AVERAGE PROPERTY PRICES
It’s useful to research your favoured suburb here in order to find average property prices. If we take a look at Bowral, for instance, you’ll find the average market trends and property prices here. Burradoo is another popular town in the Southern Highlands- typically fetching a higher price compared to Bowral. You can check out stats for Burradoo here.
Four-bedroom houses in Bowral currently average 100 days on market (DOM), compared to Burradoo at 117 days. The median house price in Bowral is $1.65 million, showing a slight decrease of 0.3% over the last 12 months. In contrast, Burradoo’s median house price is $2.6 million, with a significant price drop of 10.3% over the past year.
Overall, Bowral’s days on market average 78 days, down 20% from the previous year. Burradoo’s DOM is 68 days, which is up by 9% over the last year. In the past 30 days, there have been 22 sales in Bowral, a 47% increase from this time last year. Meanwhile, Burradoo has seen only 3 sales in the last 30 days, a 50% decrease.
This data indicates that Bowral’s lower price bracket and more accessible stock result in a higher number of transactions and quicker turnaround times compared to Burradoo. Despite the price growth dip in Burradoo, the significantly higher median house prices are hindering sales. Additionally, the limited stock available in Burradoo contributes to higher prices and reduced affordability. (Source CoreLogic)
Stay tuned for more insights to come.
PS If you’re looking to buy or sell in the Southern Highlands, here at Earth Property Buyers Agents, we are happy to help. Just reach out to us and let us know what challenges and needs you have, and we’ll do our best to provide you with an individualised and valuable path forward.
We look forward to hearing from you.
Call us on 1300 19 88 19 for an obligation free chat to see how we can help you find your dream property in the Southern Highlands.