Why Supply?

We are half way through the spring selling season and, as we’ve almost come to expect, the market has not performed typically for this time of the year.

So, what has happened?

A lot is being discussed in relation to housing supply across the country, but particularly in the major cities, and its effect on prices. In the aftermath of the first few interest rate rises last year, listings were very tight earlier this year. This fuelled competition and buoyed prices and created the fear of missing out (FOMO) in buyers. The prediction was that the onset of spring would bring with it the traditional spike in homes for sale.

However, the end of winter kickstarted the selling season a little earlier as property owners tried to jump in before the spring sellers flooded the market. This took most by surprise as prices didn’t appear to be affected by increased borrowing restrictions and costs. In fact, demand remained high, with a lot of property owners feeling insecure about changing their circumstances in uncertain times. This has meant a relative shortage of stock during spring which has created a floor under prices preventing them from falling.

This brings us once again to that fundamental economic principle of demand versus supply. Where high inflation, cost of living pressures and high interest rates would lead one to assume an ensuing softening of prices, this has not been the case as stock levels are running at around one third less than typical for this time of the year. When this happened prior to the first interest rate rise last year, it created a fear of missing out (FOMO) amongst buyers and they were making confident, rapid decisions. With the economic climate as it is, buyers are still looking to purchase property but approaching that decision with a lot more cautious thought.

We are approaching that time of the year where time is expiring to complete a deal by Christmas – but there is time. We know it’s a good time to sell now and that may change next year as financial pressures take hold, So, if you are considering selling, let’s talk now.