What's happening in Australia's property market? | A Current Affair

What's happening in the property market?It's a question being asked in a lot of households by sellers, buyers and renters.The Prime Minister describes the housing market as bonkers and wants new rules on negative gearing and capital gains tax to put the brakes on prices.So where is the market heading?I spoke to Alice Stoltz, property editor at Domain, a little earlier.Alice, Domain has fresh data in on the property market.

What's it showing?

Well, Deb, we've seen an absolute surge in listings.We haven't seen listings across the country this high since 2019.And when you go down to a granular level, it's even higher in certain states, especially Sydney and in Melbourne, our biggest auction -centric markets.Now, what this means is we've suddenly switched from what was quite entrenched as a seller's market and what is rapidly becoming a buyer's market, because on top of that, we're also seeing sluggish and pretty soft clearance rates take hold.

And it is the first weekend of winter.typically a quieter time of year on property listings and sales.Is that still the case?

I think that's what's really interesting.It seems to me at the moment we're in for probably a very kind of arctic feeling winter as it were and I think what we're seeing a lot of this is the response of sellers last year who saw very decent price growth and quite good recovery throughout the market, made the decision to list their property and some of them are kind of the ones exposed out in the market at the moment.So traditionally winter is the quieter time of the year, but I think off the back of growth we have seen historically, people did decide to push forward and sell.But what's happened is the market has just changed so rapidly and it kind of has turned on a dime, so to speak.So we're seeing many more sellers in market than what we would normally in a winter period.And what does that mean for auction clearance rates?

Well, look, I think that's the question at the moment, isn't it?I think we know that many buyers have long wanted more options when it comes to supply and stock available.Now they've got it.However, they haven't got the confidenceconfidence to stretch themselves at auction.They're not feeling the confidence with the interest rate cycle.

And at the moment, you know, we've had 16 rate rises over the past five or six years and only three cuts.And what that's doing is dampening what they can actually spend.And particularly amongst them, you've got first home buyers fighting out in market.We have definitely seen investors pull back in market after the federal government's decision around negative gearing and capital gains tax.And that has been quite profound, and they've pulled back quite rapidly out in market.However, the buying envelope of buyers, particularly first home buyers, is constrained after the current rate rise and with the potential of further rate rises this year.

And just overall, all.Economic uncertainty is really putting sand through the gears of people when it comes to bidding.

And we've had the Treasurer as well, Jim Chalmers, this week saying that he's happy for prices to be coming off because it's good news for first home buyers.Is that really the case?

Look, I can understand why that may be one school of thought, and I think many people understand the inequity that exists in the market and how it is just so challenging, particularly for first -time buyers to get into the market.But I think you have to look at the other side of that coin and understand that many people recently bought property when prices were more stable and now a stronger positioning in the market.They're now sort of thinking, Am I going to be able to use this as a wealth vehicle, as I thought it was, because the conditions, the rules of play have suddenly changed?And that clearly is going to be a very bitter pill to swallow.But I think this sort of tension around do we want house prices to go up, to go down, I think most of us recognise that we need to make the market more affordable, particularly first home buyers, but the challenge is how much of a price are other people having to pay for that.

So is it a fair description that we got from the PM yesterday that the property market's bonkers?

Certainly a colourful description and I think certain parts of thecountry it has been bonkers but I think for a lot of people it's just the good old -fashioned appeal of bricks and mortar that they've come to rely on and it's also the end of the day home is where the heart is and it remains an incredibly important part of people's lives.

Yeah certainly some big changes to deal with.Alice thank you so much.Thanks Deb.Now to where things are at for people trying to sell property.Neil Jenman is a well -known real estate consumer advocate and author who has a new book out called Questions Every Seller Should Ask.And he joins me now.

Neil, that makes my job a lot easier.What are the questions we should be asking?

Well, there's 212 questions in the book, Deb, but I'll give you a couple very quickly.How do you recognise the best agent?I mean, top agent...Everybody seems to be the top agent these days, but top agent doesn't mean you get the top price.And as you know, anybody who's been following the industry, a lot of the top agents have now been banned, struck off and things like that.So, we tell you how in the book you can recognise who truly is the best agent.

The other thing to do is what price should you be asking?a very good one that most people don't know how to do that.They shouldn't necessarily be guided by one particular agent.Another question is, how do you know when the buyer is actually offering you their very best price?And then when we get towards the end of the book, there's questions there such as, you know, what happens if nothing happens?What should you do then?

Yes.

And this is not a new thing.You've been writing about this for the past two decades.What have you seen change though?

What I've seen change is the ethics of plummeted, they really have.30 years ago, all of us, your viewers watching this today, those who were working then, the wages of the average Australian have increased three times in the last 30 years, about treble.But the wages of the real estate agents, the commissions, have gone up 10 times.That meant that, of course, that agents these days can sell a house for, you know, average house in, say, Sydney or Melbourne,be getting close to $2 million in places now. That'sThat's $50 ,000.

It's a lure of... good money and the greed comes into it very, very powerfully.But the other side is, is if the agents don't sell anything, they don't get paid anything.So they're not really worried about the price, they're worried about the sale, they want the sale.And that's where sellers often find themselves getting short sold and getting bullied and pushed down, yes.

How do you manage that though?Because if all real estate agents are playing for the same songbook, it can be very tricky for sellers to actually try to ensure that they are ahead of the game?

Well, this is why they need to know how to recognise the best agents and some agents are...There's a few.I mean, I've met a couple of them that are pretty good.But the best way to tell which is the best agent are those who don't want any money until the property's sold.The big problem today, Deb, is people are asked to pay thousands of dollars in advance, and if their home doesn't sell, they lose thousands of dollars.Now, there are 195 countries in the world, and Australia is the only country, New Zealand's following us a little bit, but the only country in the world where people can lose money if they don't sell their house.

It's terrible.It's called VPA, which means vendor paid advertising.So what they need to do, when you say playing from the same songbook, look at that songbook, which is the agency agreement and cross out the nasty clauses in it.The first policy for any family to keep their home safe is to say that I am going to do it my way, not your way.And if you don't want to do it my way, then I'll find another agent.

Well, Lill, it is our biggest investment.We've got to make sure we get it right.Thank you so much.

Thank you for having me on.