Wed Aug 30 2023

Tim Lawless Interview:

• The rise in fresh listings will test the depth of buyer demand in spring.
• Advertised stock levels have been a key factor supporting housing prices.
• The average number of purchases in the market is around the five-year average, indicating that population growth is translating more into rental demand rather than purchasing demand.
• As supply levels increase and approach or exceed average levels, there may be a decrease in buyer demand, resulting in slower price growth.
• Sydney and Melbourne are seeing an upward trend in new listings, while markets like Perth, Brisbane, and Adelaide have tight supply levels and accelerated value growth.
• Albany in Western Australia has seen a 63% fall from its five-year average in total listings, indicating low supply and high demand.
• Real estate agent activity, such as comparative market analysis (CMA) reports on RP Data platform, provides a lead indicator for fresh stock coming to the market.
• Sentiment will play a crucial role in the turning point for the property market. Factors such as interest rate decreases, easing of serviceability buffers by APRA, and inflation coming under control can improve sentiment and drive growth in purchasing activity.

Impact of Macroeconomic Factors:

• Affordability constraints and reduced borrowing capacity due to lending restrictions may concentrate investor activity on lower-priced properties ($400k-$600k range).
• Foreign buying activity has picked up recently, potentially driven by families purchasing investment properties for students struggling to find accommodation.
• Regional markets with strong interstate migration flows may experience increased purchasing demand due to affordability advantages over local markets.

Regional Market Observations:

Areas with Rising Listings: 1 . Ballarat, Dalesford area - Increasing by 61%, benefiting from regional lifestyle appeal. 2 . Inner ring markets of Melbourne (Hawthorne, Stonington East) - Showing a decline from previous high levels but still above their five-year averages.

Areas with Low Listings: 1 . Albany, WA - 63% fall from five-year average, potential retirement destination with fewer listings. 2 . Hobart - Historically low levels of listings leading to reduced rental shortage and possible market correction.

Long-Term Investment Considerations:

• Sustainable growth requires diversification in the local economy beyond lifestyle appeal.
• Investors should consider long-term drivers of capital gain, evaluating economic diversity and infrastructure development in the region.
• Concentration of investment activity can create risks, as seen in previous market cycles where short-term spikes were followed by years of stagnation or slow growth.

Impact of Sentiment on Market Growth:

• Improved sentiment driven by lower interest rates, easing serviceability buffers, and control over inflation could lead to increased purchasing activity and broader market growth.

Sentiment and purchasing activity:

• Once sentiment returns to normal levels, there will likely be a rise in purchasing and housing activity overall.
• As sentiment increases and interest rates decrease, the time to buy a dwelling index may show more significant growth.

Low supply levels as a safe haven:

• Due to low supply levels, many consumers still see the property market as a safe haven.
• This has led to difficulty for investors in finding investment-grade properties.

Opportunity for contrarian thinkers:

• With an expected increase in listings during the spring season, it presents an opportunity for contrarian thinkers.
• Buyers can consider A and B plus properties that have been historically difficult to access.

Consider timing of sentiment changes:

• It's important not to make purchase decisions too close to events that may change sentiment.
• Being ahead of mass thinking allows buyers to take advantage of opportunities before they become widespread.

Markets within markets:

• Cooling prices may be seen in Sydney and Melbourne as supply continues to increase.
• Adelaide, Perth, South East Queensland, Townsville, and Cairns are expected to be interesting markets in the next few years.

Preference for steady growth over boom-bust cycles:

• It would be preferable to have a more sustained market with longer growth rather than volatile boom-bust cycles.

YouTube transcription service as a life hack:

• YouTube automatically generates written transcripts for every video uploaded on its platform.
• To access the transcript while watching a video on desktop, click on the three dots at the bottom right-hand corner of the screen and select "show transcript."

Record number of auction listings upcoming:

• The current weekend is forecasted to have around 2000+ auction listings.