WHY SELL NOW ?
The main event looming on the near-term horizon that may accelerate any slow down phase is if the central bank adjusts monetary policy sooner rather than later . The Reserve Bank of Australia ( RBA ) has maintained the official cash rate at a record low 0.1 per cent since November 2020 , in addition to its quantitative easing program that has injected more than $ 400 billion into the economy through the recession .
It ’ s clear the RBA is firmly focussed on inflation outcomes along with labour market conditions and wages growth , to guide their policy decisions . Financial markets and economists believe inflation pressures will force the RBA to start normalising rates by August , ahead of spring selling season . Higher interest rates will slow economic growth , the jobs market , and housing to keep inflation under control .
While inflation “ has picked up more quickly than the RBA expected ”, the central bank is not ready to conclude that inflation will remain sustainably within their 2-3 per cent target range . Uncertainty related to the war in Ukraine , rising energy costs and global supply chain disruptions are adding further complexity to the policy environment .
While the unemployment rate is trending towards the sub four per cent range , a more significant lift in wages remains the missing piece of the puzzle before the cash rate shifts higher . The RBA notes wages growth has picked up ( the wage price index was up 2.3 per cent last year ) and expects wages to rise further under tight labour market conditions , but the RBA anticipates growth in wages will be only gradual .
Despite the growing downside risks to the housing sector , other factors should help to offset a significant downturn . As the economy strengthens and labour markets tighten , the risks around mortgage stress or default should lessen . Open international borders will help to support demand , initially from a rental perspective , but longer term for home purchasing as well .
The number of properties for sale will also increase over 2022 which creates more choice for buyers . What we do know is that market fundamentals right now are still helping our clients who are looking to sell . Our data tells us that our sellers who choose to sell via the auction method are rewarded with a 12 per cent higher price under the hammer than if they ’ d accepted a prior offer .
Since the start of 2022 , our group booked 4532 auctions , a 50 per cent jump on the prior year . We cleared 81 per cent of all auction stock under the hammer , with an average of 5.8 registered bidders . There ’ s a deep buyer pool for sellers to take advantage of right now . Our question remains , “ What are you waiting for ?”
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