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With spring just around the corner, buyers have been busy turning to brokers to access finance ahead of the busiest selling season of the year.
Emerging data has revealed that home buyers have been busy readying themselves for Australia’s busiest property selling season.
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Spring is always considered one of the country’s biggest seasons for real estate, with CoreLogic data showing that listings rise by 18.2 per cent in spring (according to the decade average).
In turn, this typically sees sales increase by 8.3 per cent, led by cities across the east coast.
According to CoreLogic’s head of research Eliza Owen, cities with colder temperatures in winter generally benefit from the biggest burst of activity in spring, with Melbourne experiencing a 26.7 per cent increase in listings and a 10.5 per cent lift in sales; Sydney seeing 20.3 per cent more homes on the market and 10.4 per cent more sales; and Hobart benefiting from a 27.9 per cent listings bump and 12.3 per cent more sales on average across the decade.
While Owen has said that this spring selling season may be tempered by the slowing economic conditions, low consumer sentiment, and decade-high interest rates, auction activity has been rising over the past few weeks.
Around 2,300 auctions are expected to be held this week, with the volume of auctions likely to rise more substantially into spring.
Plus, across the combined capitals, Domain data showed that new home listings increased to their highest on record in July and are higher annually for the fourth month in a row, while real estate network Ray White reported a 9.7 per cent increase in new property listings in the month to 18 August (when compared to the same time last year).
Indeed, broking group Loan Market has recorded a 23 per cent spike in finance pre-approvals on the last year, as buyers gain confidence from increased listings in the lead-up to spring.
When comparing figures from 27 July to 26 August 2024 compared to the same period in 2023, Victoria has had the highest year-on-year surge in pre-approval applicants (40 per cent up), followed by Queensland (29 per cent up) and NSW/ACT (13 per cent up).
Loan Market broker Tommy Nguyen said borrowers had been “encouraged” by rising numbers of property listings in capital city markets after a prolonged undersupply.
“There are more people looking to get into the market this spring,” Nguyen said.
“We’ve seen the cash rate hold steady at the last seven RBA meetings and that’s provided buyers with more certainty around what they can borrow.”
He added that upgraders and first home buyers were leading his pre-approval inquiries.
“A pre-approval is an important first-step for many people to get the attention of sellers and real estate agents,” Nguyen said.
“As we see more listings and auction volumes take off from this weekend, I’d expect to see pre-approvals rise further, again.”
While more borrowers are seeking pre-approvals, data from Mortgage Choice recently found that a third of borrowers are needing to secure multiple pre-approvals as they cannot find the right property before their pre-approval expires.
This is believed to be largely due to a lack of appropriate housing supply.
Indeed, Finsure Group recently found that almost 50 per cent of pre-approved investment loans failed to settle within 90 days.
Given that this is mostly due to a lack of supply in the retail market and brokers not having the capacity to convert these pre-approvals, the aggregator recently partnered with property investment solutions specialist Wealth Street to give broker clients priority access to off-market stock.
The new partnership has reportedly helped settle a 90-day investment pre-approval more quickly, with the shortest time being 20 days.
Have you seen an increase in pre-approval activity? Let us know in the comments below!
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