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As consumer confidence hit a record low in April, the real estate market is now faced with buyers and sellers abandoning the market until there’s more certainty. The number of new properties listed for sale in the 28 days to April 19 has fallen significantly, 28.7% below the same period last year.
Auction clearance rates in April fell to 30.2% across the capital cities, with a large portion of properties being withdrawn or sold prior to auction. The market is now seeing the majority of properties sold by private treaty sales rather than auction.
Despite the Reserve Bank Governor Phillip Lowe warning that by June we will be facing the worst economic contraction in 30 years, there’s been little change in property prices; in the 28 days to April 21 the change in value was 0.4%.
First home buyers now taking advantage of the First Home Loan Deposit Scheme have helped fuel buyer interest. However, the true test for the market will come once ‘mortgage holidays’ end, with increased mortgage stress seemingly inevitable.
Investor markets remain the real challenge with an oversupply of stock and a decline in demand for rental properties. Figures from NSW Fair Trading show a 7.5% increase in bond refunds and prospective purchasers now having to decide how comfortable they are with risk.