Listing volumes in the upper end of the market were lower, with fewer people looking to sell their family homes, he said, similar to during the global financial crisis.
“In a crisis, the typical behaviour we’ve seen is that people stop, and they wait to see what will happen and will wait until after it’s happened,” Armstrong said. “People who are 50-50 about selling this spring might be waiting to see what happens and will wait until next year.”
Even though the outlook for the start of spring is slower, some sellers and buyers are still keen. Melbourne’s auction clearance rates have ticked higher, remaining above 55 per cent for the past three weekends.
Auction numbers are also on the rise, with 730 scheduled this weekend, a jump of 12.5 per cent compared with last weekend.
Adam Bulic is selling his home in Balwyn North during spring and is not worried.
As the executive director of housing developer Bluestar Living, he has ridden the highs and lows of the property market in Melbourne before.
He’s selling the stylish home, which he built and where his family has lived for the past five years, and is hoping to buy and build again in the inner east. He knows he will be buying in the same type of market he is selling in.
“Everything is relative. Some people will always pay a premium for a property in a really good area. Because I’m looking again, I need to pay a premium as well.”
His view is that the long-term outlook for property is, as it has always been, that values can only rise.
Bulic’s selling agent, Ray White Balwyn director Helen Yan, is – like other agents – expecting a slower spring market.
“The market is quiet because of the increased interest rates,” Yan said. “At the moment, it’s similar to 2019 and people are holding back – it’s a nervous time for people, including Chinese buyers.”
Though the market had slowed and fewer properties were being listed, homes were still selling under the right conditions, she said, especially those that did not need renovation or building work.
The buyer caution could translate to further price falls, economists predict. Westpac’s latest forecast is that prices in Melbourne could fall 8 per cent this year and 10 per cent in 2023. ANZ has also cut its outlook and expects falls of between 10 per cent and 15 per cent by the end of next year.
Westpac senior economist Matthew Hassan said spring would be a testing time for the property market in Melbourne.
“There’s a meaningful correction underway and more interest rate rises are to come,” Hassan said. “Sales have pulled right back from their very high starting point earlier this year … and sellers might find they are heading into a buyers’ market.”