With FOMO finally shifting from buyers to sellers in the wake of rising interest rates and inflation, is this the beginning of the end of the sellers market?

As many Australians already know, the effects of the first interest rate hike in more than eleven years are now being felt right across the nation. According to CoreLogic’s latest report, figures show that national property prices have dropped by -0.1% in May 2022. 

In fact, the Home Value Index (HVI) showed Sydney (-1.0%) and Melbourne (-0.7%) dwelling values continued to record the most significant month-on-month falls, while Canberra (-0.1%) recorded its first monthly decline since July 2019. Further data released this week from Corelogic also shows that the number of homes for sale is almost 25% less than what it was this time last year, in July 2021. 

While the pandemic induced property boom propelled property prices to never before seen heights, what goes up must come down. With the balance of power starting to shift back towards buyers instead of sellers, does this mean that the end is nigh for the sellers market that dominated headlines during the last two years?

Sellers Are Now The Ones Driven By Fear Of Missing Out 

While winter is not exactly regarded as peak season for Melbourne’s property market, industry experts are predicting a busier than average quarter as sellers rush to capitalize on premium house prices while they last. 

Over the course of the last two years, we’ve seen demand far outstrip supply when it comes to the national real estate scene, and a sellers market that limited opportunities for first home buyers to get a foot on the property ladder, particularly during 2021. 

However, with an increase in the number of listed properties for sale, and many first home buyers dropping out of the market in the wake of decreasing affordability, the market is now gradually approaching a more balanced position. 

Thanks to cost of living pressures, rising interest rates and stubborn levels of inflation, it would seem that the tide is finally starting to turn back in favour of buyers. In fact, Jellis Craig Chief Executive Nick Dowling said that FOMO – or fear of missing out – had shifted from buyers to sellers over the past few months, as the market changed from red-hot back to a semi-normal level. 

“I think the notion that FOMO has switched from buyers to sellers has been happening for a couple of months now as people have been anticipating interest rate rises,” Dowling said. “A number of people have pushed forward quicker than otherwise they would have liked to.”

When combining lower auction clearance rates with more homes to choose from among a smaller buyer pool, Sydney and Melbourne are leading the way when it comes to leading the transition from a sellers market into a buyers market. However, it’s also worth noting that outside of these capital cities, the market is still holding strong for sellers, and paints an entirely different story. 

For vendors looking to make the most of the final days of the sellers market in Victoria, it’s crucial not to be seduced by the possibility of a high sale price. If your real estate agent is suggesting a higher advertised rate than what other similar properties are asking for, be sure to push back and press them for the data that backs up their logic. Like it or not, failure to do so could see you winding up with a property that sits on the market for weeks or months longer than it should, and cost you both time and money. 

Should you be looking to sell your home or purchase a new one, enlisting the services of a free property advisor like ESPA can often be a game changer. As an example, your advisor would likely research the property, local agents, check the zoning, evaluate market conditions, and communicate clearly with you regarding all of your options – but where do you find one?

Taking The Stress Out Of Selling Property 

As a completely free service, Emergency Services Property Advisors provide property advisor services to Police, Fire, Ambulance and S.E.S personnel and their families right across Victoria.

Luke and the team at ESPA are passionate about providing support to some of Australia’s most valued public servants. Along with key industry insights, ESPA also works with a broad range of service providers linked to the real estate industry such as conveyancers, trades, legal practitioners and mortgage brokers.

If you are an emergency services worker looking to potentially buy or sell property in the future, please get in touch with Emergency Services Property Advisors today to discuss how we can turn your real estate dreams into reality, or call Luke directly on 0414 757 705.