Sales volumes across Australia’s mainland states have increased as buyers get used to high interest rates and fear of missing out (FOMO) drives them to buy before home values go any higher. 

These are the findings of a report by digital settlements company PEXA, which shows the number of residential property settlements across the five mainland states in the March quarter was 7% higher this year compared to last year. 

There were 146,978 settlements, with the highest number being in Queensland at 40,973. There were 37,522 settlements in Victoria and 37,236 settlements in NSW. 

The biggest growth in sales volumes was in NSW and Western Australia with an 11% lift compared to last year.

The strongest growth in city sales was in Sydney at 16% and Melbourne at 12%; and in the regions, growth was highest in regional Western Australia at 13% and regional NSW at 6%. 

In NSW, sales volumes were highest in the Sydney suburbs of Bankstown, Marsden Park, Macquarie Park and Kellyville. 

In Victoria, sales were highest in the Melbourne suburbs of Tarneit, Craigieburn, Cranbourne East and Clyde North. 

In Queensland, sales were highest in Newtown in Toowoomba, Andergrove in Mackay, Urangan in Hervey Bay and Yarrabilba in the City of Logan south of Brisbane. 

One of the likely contributors to higher sales volumes is the stabilisation of interest rates in 2024. 

The Reserve Bank has not changed the official cash rate for seven months. This not only indicates we are likely close to the end of rate hikes but it also gives buyers the confidence to make decisions with the finance approvals they have in place now.

When rates are continually rising, buyers have to keep reassessing their borrowing power and adjusting their budgets. 

We’re also seeing FOMO in four of these mainland states due to rising property prices. Despite higher rates, home values are increasing due to a supply/demand imbalance favouring sellers. 

This is happening everywhere except Victoria, where there is a higher number of homes for sale this year – but still good demand – and this has kept home values stable. 

The latest CoreLogic data shows home values have lifted 22% in Perth, 16.3% in Brisbane, 14.4% in Adelaide, 7.4% in Sydney and 1.8% in Melbourne over the 12 months to May 31. 

In the regions, values have lifted 14.8% in Western Australia, 11.8% in regional Queensland, 10.6% in regional South Australia, and 4.3% in regional NSW. They've slipped 0.6% in regional Victoria.

Another contributing factor to buyer confidence is the resilient jobs market. 

When buyers feel secure in their jobs, they’re more likely to compete strongly at auction for the homes they want. 

We also have extra demand in the established homes market today because it’s taking longer than usual to complete new homes due to higher construction costs and a labour shortage. 

Supply remains tight in most markets because homeowners are keeping up with their home loan repayments, so we’re not seeing many distressed listings coming onto the market.

The strong jobs market means homeowners can take on second jobs or negotiate pay raises, and many still have healthy savings buffers from the pandemic, so they’re managing to keep up for now. 

All in all the market is strong, and robust competition is pushing both prices and sales volumes up. 

By John McGrath, Chief Executive Officer of McGrath Estate Agents. 

For more information including articles, checklists, guides and more visit McGrath’s Insights Centre.

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