Supply & Demand | May 2023 Newsletter

May has been an interesting month in our real estate world. It all started with an interest rate rise but we have really seen the impact of ‘supply vs demand’ affect the outcome of sales. With far lower than normal volumes of property on the market, we have seen a great demand, especially for houses in the $600,000 to 1 million range. This has resulted in inspection numbers increasing and any houses listed in this price range have been put under contract within a week or so of hitting the market.

Buyer confidence is being driven by lower change-over costs if they are buying up, and the feeling that we are close to the top of the interest rate cycle meaning we’re close to the bottom of the buying cycle. For sellers it’s a great time to upgrade, with cheaper change-over costs if they are buying up, and there are less competing homes on the market, driving some strong sales results.

There have been some changes to the first home buyer stamp duty scheme announced by the NSW government which come into effect on July 1. This is a win for 1st home buyers looking to spend between $650,000 to $800,000 on their first home.

Stamp duty changes for first home buyers:

•    First home buyers will pay no stamp duty on homes worth up to $800,000, and a concessional rate for homes up $1 million, under the NSW Labor government.

•    This is increased from the current $650,000 stamp duty exemption and $800,000 concession.

•    The government aims for the policy to take effect from July 1.

Looking ahead to June, I’m not expecting the RBA to increase interest rates next month. If this is the case, we could see buyers have increased confidence in the market once more, leading to more buyers through doors at open homes and more competition for properties, which would likely see prices continue to stabilise, if not slightly grow.

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