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MoneyHousing market at its slowest in 12 years — but is that about to change?

00:52  11 june  2019
00:52  11 june  2019 Source:   abc.net.au

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The housing market has reached its slowest pace in 12 years , with new data revealing home owners are holding off on listing properties. Over the same time the number of listings nationally has dropped by 20 per cent. The housing snapshot is taken at the end of May each year by industry

Homeowners are holding off selling their properties, with fewer new listings than at any time in the past 12 years .

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Homeowners are holding off selling their properties, with fewer new listings than at any time in the past 12 years.

The slowdown is most noticeable in Sydney and Melbourne, where there are 30 per cent fewer properties for sale than there were at the market's most recent peak.

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December is usually the slowest month for the housing market , but this season is not so normal. Some unique dynamics may make this December one of the That is why sales of both new and existing homes have been weaker for several months, but that also presents an opportunity for buyers.

Over the same time the number of listings nationally has dropped by 20 per cent.

The housing snapshot is taken at the end of May each year by industry analyst CoreLogic.

It shows the number of real estate listings in Brisbane, Canberra and Perth has also fallen over the past year.

But in some other capitals the market is more positive, with Adelaide listings increasing slightly, and Hobart and Darwin also improving.

'There were just no buyers'

The slowdown is being felt even in gentrified suburbs such as Yarraville, in Melbourne's inner west.

Property investor Dana Sawyer spent $30,000 on a renovation before listing her three-bedroom house at $800,000 to $850,000.

But the house went on the market just before the election and failed to attract any offers.

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The housing market has reached its slowest pace in 12 years , with new data revealing home owners are holding off listing properties. “What that says is with prices having come down so rapidly in the major capital cities, those people who could sell just simply don't want to test the market .”

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Ms Sawyer said she was surprised that potential buyers were so hesitant.

"Everyone was very nervous; it seemed like people were just reluctant to do anything," she said.

"There wasn't much competition, the price seemed OK, there were just really no buyers."

Local real estate agent Adam Welling said Melbourne buyers had become reluctant.

"Even if it was staring them in the face that they should buy the home, they weren't pulling the trigger," he said.

He believes buyer reluctance has become so widespread it has led to owners delaying the decision to list their homes for sale.

"A lot of vendors are worried that their home won't sell, because the buyers aren't making buying decisions," he said.

"The people who can hold on are just putting things on the backburner and seeing what happens."

But he says the resulting lack of supply on the market has put a floor under prices.

"That's led to multiple bidders at auctions again. That's led to some prices just tripping up higher. It feels like we have bottomed out slightly," he said.

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Competition in the housing market finally began to cool this year , as listings multiplied and price gains moderated. Gains continued to slow throughout the spring and supply is now expected to flatten over the next three months and could hit its first decline in October of this year , according to realtor.com.

Downsizing put on hold

In Sydney, retirees Tom and Larissa Bergmann have shelved their decision to downsize, due to the sluggish market.

They have lived in their house on a quiet street near Botany Bay for more than 20 years.

"When we first moved here, the prices were going up and up all the time," Larissa Bergmann told 7.30.

"But lately it's pretty levelled out and possibly even — what would you say, stagnant? Lowered?

"Yes, definitely lowered, that's for sure."

It's a big house with a garden, and with both now in their late seventies they have been considering a smaller property that will be easier to manage in the coming years.

"I was looking around because this place is so big," Ms Bergmann said.

"I'm hopeful that we might at some stage soon move out so that I have less to worry about."

But they are not expecting that to be any time soon.

Positive signs

Domain economist Trent Wiltshire sees signs that things are slowly turning around.

He points to the Reserve Bank's recent rate cut, changes to lending rules by the banking regulator APRA, and the result of the federal election as contributors to a shift in mood.

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"Buyers are a bit more interested in buying, even just a few weeks post the election, so there's been a bit of a turnaround," he told 7.30.

But he says Domain's property sales records show that earlier this year the number of housing transactions reached the lowest level in decades.

"In the early part of 2019 we did see sales volumes fall to their lowest level in at least two decades," Trent Wiltshire told 7.30.

"It's a bit of a self-fulfilling prophecy, that people see prices falling and delay a purchase, and on the other side sellers are very averse to making a loss."

Mr Wiltshire believes the market will probably bottom out this year.

"But I don't see a big turnaround happening, maybe just prices bottoming out, then pretty steady prices for the next year or so."

When 7.30 visited Ms Sawyer, she was about to try again and hoping for a result at auction on the weekend.

"Definitely more parties have been through," she said.

But if that doesn't work, she has a plan B.

"If we don't get the price we will keep the property and put it back on the rental market."

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Australia, New Zealand dollars drift off as data disappoint.
Australia, New Zealand dollars drift off as data disappoint

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