New data shows that there are more properties on the market now than at any time since 2012.But the tightening of credit rules and pessimism about the future mean buyers are scarce and sellers are being forced to be patient or offer heavy discounts — and sometimes both.
“There’s not as many buyers around which simply means the rate of absorption is quite low.
“While new listings are tracking really low, particularly compared to a year ago, the total number of homes being advertised for sale is actually really high.
“It’s the highest level we’ve seen since 2012, which was the last time the housing market was in a downturn.”
There has been a dramatic increase in how long it is taking to sell properties over the past year.
More than 83 per cent of all properties in Sydney have been on the market for more than 60 days, an increase of almost 10 per cent on last year.
In Melbourne that figure is 80 per cent of all properties — a jump of more than 20 per cent.
Properties are also taking longer to sell in Canberra, Brisbane and Adelaide.
“Buyers are absolutely back in the driver’s seat,” Mr Lawless said.
“They have plenty of stock to choose from and they can negotiate quite hard on the purchase price.”
Sales are down 15 per cent across Australia, but that figure increase to more than 20 per cent in the big markets of Sydney and Melbourne..
“One of the primary factors is access to credit is now much harder, particularly for investors,” Mr Lawless said.
But owner-occupiers also suffered.”Over the second half of 2018 it was also very, very noticeable that owner-occupied credit flows started to slow very sharply,” he said.
Pat and Shirley Tucker have put their four-bedroom home in Melbourne’s eastern suburbs on the market.
They want to sell so they can downsize for their retirement.
Despite the prestigious location, they are struggling to find a buyer and have had to lower their expectations.
“We’ve had to temper our prices,” Ms Tucker told 7.30.”We’ve got real estate agents coming in here giving us strange numbers and we knew they were unrealistic.”
Last year they received several offers but none that they considered good enough.
“We got some real, genuine interest,” Mr Tucker said.”We actually had three firm offers.
“We’re realistic. We know the market’s cooled off a bit [but] the offers were just a little bit low.”We genuinely want to sell the place but we don’t want to give it away.”
Their real estate agent David Fileccia said the Tuckers’ home would have sold quickly for a premium in previous years.
“There’s a lot of negativity. So buyers will buy into that, and sentiment and confidence is everything in real estate,” he said.
Mr Fileccia believes going to auction is no longer as appealing as it once was.”I think the challenge with selling a home is just the method of sale,” he said.
“A lot of people still employ the auction technique, and post the royal commission I think the challenge has been obtaining finance prior to auction.
“We’ve sort of changed that strategy and we’re doing a lot of expressions of interest now and we’ll work with terms that we didn’t necessarily use in 2016 and ’17.”
The house in Sydney’s western suburbs has been on the market for six months and Mr Abraham has lowered the price significantly, but is still trying to find a buyer.
“It’s a nice two-bedroom, small two-bedroom home [with a] comfortable private backyard,” he said.
“We’ve actually recently bought a property elsewhere. And we need to offload this one to just take a bit of the pressure off.
“We have had some serious offers since then but unfortunately they fell through.”But there are still people trickling in, having a look, having some interest but as of now, no, no 100 per cent offers have been submitted.”
“There are a lot of a lot of good people that can service loans that can’t get loans,” he said.
He is still upbeat about finding a buyer soon, but does not want to get trapped if the market continues to fall.
“I guess everyone’s worried, especially people who are selling,” he said.
“We don’t want to be caught up in that where, you’re going to have the house for sale for another year or six months and then lose more.”
But, unfortunately, that is exactly what Mr Lawless said the data was indicating.
“I don’t think we’re at the bottom of the market just yet,” he said.”We’re not seeing any evidence that the market’s about to turn around, we’re not seeing any evidence that credit is about to loosen either.
“All the credit flows data that’s publicly available through the RBA or through the ABS statistics is showing a fairly dramatic and consistent decline.”