Buyers and Sellers Market
Knowing when it is a buyers and sellers market is tough, but there are some indicating factors that we will discuss. The real estate market has two opposing sides: Buyers, who want to keep their costs low, and Sellers, who want to maximize profits. Depending on the numbers of available properties for sale at any one time, one of those sides might have an advantage and greater bargaining power than the other. This can be tied back to the basic law of supply and demand.
Defining a Buyers or Seller’s market varies amongst experts. For example, Nerida Conisbee, Chief Economist at realestate.com.au says that “In the simplest terms, it’s a seller’s market when prices are going up, and a buyer’s market when prices are going down.”
What Constitutes a Buyer’s Market?
When there is a surplus of property for sale and low demand for them, you’re in a buyer’s market. Prices tend to go down in these conditions because there’s less competition. Additionally, homes are likely to stay on the market for longer, putting pressure on sellers to make concessions during the negotiation process.
What Constitutes a Seller’s Market?
If the supply of homes is not enough to meet the demand from buyers, you’re in a Seller’s market. Home prices tend to go up in these conditions as buyers compete for the few options that are available, and sellers are less likely to make concessions because they may receive multiple offers. Also, homes tend to stay on the market for a shorter amount of time.
Find out when is the best time to sell >
What Is The Australian Property Market's Current Status?
Understanding whether of not it is a buyers and sellers market is difficult, especially when there are many different components of the property market across Australia. This makes it impossible at this time to categorise the entire country as being either a Buyers or Seller’s market. With interest rates continuing to rise, and property prices falling, many would argue that we are in a Buyer’s market. However, the fact that there are still plenty of properties available for sale and that auction clearance rates remain positive, would indicate that the market is not completely swinging in the buyers direction. Corelogic recently reported that the combined capitals preliminary clearance rate held above 60% for the sixth consecutive week at 63.4%, the highest level since late May (63.7%).
We would recommend you also be wary of mass-media or real estate agent speculation on buyers and sellers markets too. You have to ask the question: Who benefits from it being a buyers market and who benefits from it being a sellers market. In both those cases Real Estate agents win. Do your research. utilise tools that give you 'sold price' data on your chosen house, its neighbours and the suburb in general. This will give you an overall idea of and you will be able to make an informed decision.
If you based decisions on price activity alone, you may consider Australia to be primarily in a Buyer’s market. “Right now, Sydney, Melbourne, Brisbane and Perth would all be considered buyers markets,” says Nerida Conisbee. “Elsewhere around Australia it is far more variable. In Hobart, the strongest market in Australia, it is definitely still a seller’s market.”