Spring sellers prepare to list, but buyer demand currently outpaces supply
The spring selling season has seen an increase in sellers testing the market, and buyers are responding to greater choice with brokers reporting a significant rise in finance pre-approvals leading up to September.
Nitish Kumar (pictured above), director of Loan Market Canberra, said that pre-approvals at his brokerage are nearing levels last seen during the peak of the COVID-19 property boom.
“Stock levels across Canberra are up compared to the start of spring last year, but listings haven’t kept pace with the number of pre-approvals being written,” Kumar said. “Loan Market Canberra has just come off its biggest ever month, lodging 75 loans over August.”
Real estate network Ray White recently reported a 9.7% increase in new property listings for the month ending Aug. 18. However, Kumar pointed out that while more sellers are preparing to list, current buyer demand is not being fully met. Loan Market brokers, in total, saw a 23% rise in finance pre-approvals over the past month.
“We know there are sellers getting ready to list over spring, but at the moment, demand from buyers isn’t being met,” he said.
Kumar also noted that buyers are showing more confidence in their ability to meet repayments, despite talk of rate cuts remaining distant. The Reserve Bank of Australia has held the cash rate steady for the past seven board meetings, which has provided some stability in the market.
Pre-approvals, Kumar said, give buyers an edge by showing sellers and agents that they are financially prepared.
“There’s already a significant number of buyers with a pre-approval in hand, and I think once we see more listings come on to the market, that’ll encourage even more buyers to get their finances in order,” he said.
Loan Market’s close relationship with Ray White real estate agencies has helped facilitate introductions to both on-market and off-market properties, further supporting clients during the spring season.
Analysis of Loan Market data over the past 30 days showed that the average loan size in New South Wales and the Australian Capital Territory was $757,920, a 9% increase from the same time last year. In Victoria, the average loan size reached $626,043, also up 9% from last year.
Queensland saw an average loan size of $588,388, reflecting a 4% increase, while Western Australia recorded $538,767, a 19% increase. South Australia reported an average loan size of $488,291, a 7% rise from last year.
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