Real estate agents have been reporting an ever increasing number of buyers, but the market is not showing them the kind of sales they are looking for.
This week, the Australian Competition and Consumer Commission (ACCC) published a report that showed a 30% increase in buyers from the end of March to the beginning of April, compared to a year earlier.
The commission said that, compared with the previous year, the proportion of new buyers was up by 40%, while the proportion who bought was down by 28%.
The report, published on Thursday, found that, from March 1 to April 19, 2016, the number of sales increased by 13% to a record 8.6 million.
The rise in new buyers came despite the introduction of a two-tier system, which means buyers can pay up to $1.5 million more for a home, but must give the seller up to 90 days’ notice.
“As a result of the introduction and enforcement of the two-level system, the median price for a Sydney home sold last year was $1,000,000 compared with $904,000 a year ago,” the ACCC said.
“In contrast, in 2016, a median sale price was $2.5m.
It was the second consecutive year that the median sale prices were lower than in the prior year.”
The report said that buyers who had made a purchase in the past year were the fastest growing segment, accounting for 22% of the new home sales in the first quarter.
In Queensland, the rise in sales is more pronounced, with a rise of 28% to 2.4 million.
This followed a 25% rise in the Queensland market in the year to March 1.
But the increase was not confined to the Queensland capital, the commission found, with Sydney and Melbourne seeing the greatest increases.
At the time of writing, Melbourne was on track to be the hottest market in Australia, according to the ACCCC report.
Despite the strong growth, the numbers suggest that buyers are not showing the kind in which the market should be seeing.
New listings were down 6.7% in Melbourne, while Melbourne’s new listings were up 6.2%.
According to the report, the most common reasons for a buyer to sell were: “not a suitable location” and “not affordable”.
“These two reasons accounted for the greatest increase in the new listings market in Melbourne in the period, with many buyers moving to Melbourne from other parts of the country,” the report said.
There were also signs that buyers were becoming more selective.
According to the ACCC, the biggest increase in new listings was in the suburbs of Melbourne and the outer metropolitan suburbs.
Accordingly, Melbourne has the highest number of new listings in the state, followed by Sydney with a share of just over one in every eight new listings.
The report said the rise was mainly due to the introduction in March of the government’s “first-in, first-out” policy, which allowed properties to be put up for sale in exchange for cash.
However, it also found that many of the buyers were choosing to pay cash instead, with the number dropping from 1.9% to 0.6% between the start of March and April 19.
While the numbers are down from the first half of 2016, prices have remained fairly stable.
Real estate agent Peter O’Keefe told the ABC that it was hard to find buyers for a property at the moment, especially because there were fewer people looking to buy.
Mr O’Keefe said the government needed to find more ways to attract buyers.
“The government needs to be looking at how it can attract more people to the market,” he said.