Spring Selling Season 2022. What happened?

In the decade prior to the pandemic, new listings nationally between winter and spring enjoyed an average uplift of 21%.  This is a very large increase the market expects each year.

However, 2022 has turned out to be quite different. New listings hitting the market have not increased as expected. Spring came and went without the usual surge in listings. In fact, the number of new listings fell nationally for the first time in at least 12 years.

New listings added to the market in the three months to November totalled 118,734, down from 121,859 in the three months to August.

When we look at our local area we have seen a similar situation occurring.  The second half of 2022 has seen quite low levels of properties being listed.

In McDowall for the 12 months to 1 December 2022, there were a total of 115 properties sold, which is down 45% on the number of sales in the previous 12 months in 2021 of 177.  Bridgeman Downs is fairing even worse with sold properties down 56% from the previous year.

What made 2022 such a lacklustre spring selling season?

Property values have declined. Vendors may have chosen not to list their property in the past few months because prices have deteriorated from a peak in April. Amid the fastest interest rate-tightening cycle since the 1990s, home values declined -7% from April through to the end of November. This is the steepest decline in home values on record.

Selling conditions have changed in favour of buyers. In the three months to November 2021, the median amount of time a listing was on the market before selling was a mere 20 days. This has increased by 35 days. Similarly, vendor discounts from the initial listing price have also deepened, from -2.9% in the three months to 2021, to -4.3% in the spring of 2022.

So long as mortgage holders can afford their repayments, and do not need to move, sellers may be less and less motivated to put their property on the market at the moment.

Many buying and selling decisions were made last year. 2022 was not the only strange year for the spring selling season. COVID-19 warped the spring selling season of 2021, with record-low interest rates creating a buying frenzy. There was likely also an element of ‘catch up’ at play, with extended lockdowns putting a dampener on transaction activity through 2020 and 2021.

Last year, listing activity surged 33.1% on winter, and the spring selling season extended well into summer.  Given an unusually high volume of properties transacted last year, this may have had a slight vacuum effect on buying and selling decisions in 2022.

Where to from here?

The policy response amid the pandemic from governments and the RBA has produced extraordinary fluctuations across a range of economic activity. Extreme shifts have played out across retail spending, household savings, consumer sentiment and the housing market. The rise and fall of the spring selling season is just one of many market metrics showing a strong reaction to adjustments in the cash rate.

2023 looks like it will be a catch-up year with much more stock coming onto the market.  This could have the effect of dampening the possibility of major price rises.

With the year coming to an end, now is the time to talk with Justin or the team at Hicks Real Estate if you are thinking about selling your property.  We know that there are always a lot of buyers out early in the new year when they have some time free.  Getting your property on the market to catch these early birds may present an opportunity to obtain a great price.  We usually see a large number of homes come onto the market in late January so the competition is likely to be much more fierce then.

Talk to us about how we can get you home onto the market to catch the January wave.

CoreLogic