Sellers fearful of finding something to buy: how to navigate the tight market
Property prices are again rising considerably in 2023 and it's mostly down to an ongoing shortage of listings on the market.
Many potential sellers are waiting on the sidelines out of fear that they won't be able to buy a new home to move into, so it's a bit of a catch-22.
There are, however, ways that sellers can list with confidence and maximise their chances of making a smart and secure purchase.
Get a free property value estimate
Please select your address from the drop down
Find out how much your property is worth in today’s market.
Why are listings remaining so low?
Low listings have been a defining feature of the market since September 2022, the beginning of the spring selling season that never took off.
Confidence was rocked throughout the year as interest rates began to climb at an alarming pace with little certainty about where and when they might peak.
Property prices were continuing to decline across the country, so many sellers opted to hold tight and wait for more stable market conditions.
Despite still-rising rates, the dynamic changed early in 2023 as the ongoing shortage of listings concentrated buyer competition, helping to boost auction clearance rates and, ultimately, send prices upwards once again.
As of June, the median Australian property price has risen from +3.4 per cent from its February low-point, with markets like Sydney delivering significantly more.
Even so, total listings on the market remain more than -25 per cent below the five-year average as sellers continue to sit on the sidelines.
CoreLogic's research director Tim Lawless noted that, following the quieter winter months, "a change in the supply dynamic could become evident in spring, when the flow of listings would typically ramp up."
Current conditions are heavily favouring sellers
While a shift could be coming this spring selling season, winter sellers are finding fortune in the low-listings environment.
The latest CoreLogic report concluded "the imbalance between supply and demand has seen selling conditions turn in favour of vendors rather than buyers."
It's not just low listings that are helping sellers secure great results, though. Ray White TNG's Shiv Nair explained that still-rising interest rates have further motivated buyers.
"Buyers are nervous about pre-approvals and borrowing capacity changes. There's definitely a sense of urgency from buyers at the moment," he said.
"When an opportunity comes up they're fighting for it. Because of the lack of supply, they are being less selective. Some properties are back to selling at peak market prices."
It's that heated buyer competition that's making sellers nervous about how and where they'll be able to purchase their next property, though, creating a self-perpetuating cycle of lower and lower listings.
How can sellers also achieve a successful purchase?
Thankfully, the position of sway sellers currently find themselves in extends beyond just the sale itself.
"Because of the low level of supply right now, vendors do have leverage. They're in a powerful position," Mr Nair explained.
This leverage can be used in several ways. For one, sellers may be able to negotiate a longer settlement period, allowing for a longer stretch of time to search for a new home without urgency.
Another option would be to negotiate a lease-back of the sold property for a set period in order to wait until stock levels increase in spring, leading to an easier purchase.
"At the moment it is safe to sell now and buy later. We will see a high level of supply coming onto the market over the coming months," Mr Nair said.
"Later on, as stock levels increase, [vendors] won't have the same power to negotiate as much because there will be a lot more supply."
Thinking of selling in 2023? Here's what to consider
If you’re still on the fence about selling, we get it. It’s a huge decision that deserves all your careful consideration weighing up the advantages and disadvantages for either scenario.
Even if the market feels uncertain, it’s important to remember that it’s all relative and the market doesn’t stop. There will always be properties being listed and buyers out there wanting to purchase a home.
It's also crucial to recognise that conditions will vary from suburb to suburb, so it’s important to understand your own local market — and to do that, you really need to get granular.
Whether your property is impacted by price gains or falls depends on many factors including location, property type, and whether your home falls into the higher or lower end of the market.
If you’re seriously considering selling your home, you need to do your research. As a first step, get a ballpark estimate of what your home might be worth by using a free online estimation tool.
Speaking to a top local agent is also one of the best ways to get a thorough understanding of how buyers are behaving in your suburb, what kinds of results are still being achieved, and what the best strategy could be for you to still get that dream sale result.
At the very least, it’s helpful to hear what properties are selling for, what demand is currently like for homes like yours, and to get a no-obligation appraisal of what your home might sell for in the current market. A top agent who knows your market like the back of their hand will be able to help you along the journey.