Buyers per listing have surged - what does it mean for sellers?

The brakes were surprisingly slammed on the property downturn in February as price declines suddenly levelled right off. 

New analysis shows that the number of potential buyers per listing has shot up fast in 2023 which could help to explain why the correction phase hit a rapid pause. 

So does it mean sellers have the upper hand again?

Demand is outpacing supply in 2023

One of the defining features of the past six months in the property market has been a severe shortage of listings. 

Last year's spring selling season never really took off, although buyers have also been hesitant as uncertainty around interest rates persists. 

The story has shifted in 2023, though. According to PropTrack's latest analysis¹, "competition among buyers has reached the highest level in a year in every capital city except Hobart."

PropTrack senior economist Eleanor Creagh explained that "though demand to buy property has weakened, there are fewer buyers needed in the lower volume market," and that buyers are finding themselves with far less choice than usual. 

"Increased competition can constrain buyers and sellers to be price-takers, and it’s likely that the lower supply of properties available for sale in some of the capitals is tempering price falls now," she said. 

Strengthening auction clearance rates² across most markets also seems to confirm that the increase in buyer competition is helping sellers in the current market. 

What are buyers looking for in the 2023 market? 

There may be a higher proportion of buyers out there in the market, but not all home sales are finding the same levels of success. So what is it that buyers are gravitating towards right now? 

Realestate.com.au provided some insights via search trends from buyers, looking at which keywords were seeing the most growth in the new year. 

The majority of the top movers — things like swimming pool, balcony and paddocks — seem to suggest a renewed interest in outdoor amenities and enhancements. 

Also, after an exceptionally wet year for the East Coast, it looks like the return of the sunshine has buyers prioritising air conditioning, often a relatively easy thing for sellers to install. 

Taking a broader view, some of Australia's top real estate agents agreed that homes that don't require much repair or renovation work are achieving the best sale results. 

"Buyers are definitely more attracted to homes that are ready to move in or are in modern condition" said Shiv Nair of Sydney's Ray White TNG. 

With trades and materials still costing so much money and time, buyers are tending to be a bit more fearful of any properties that need significant investment to come up to grade.

How can sellers capitalise on the current trend? 

After a year where conditions typically favoured buyers, it looks as though the ball may be more in the seller's court — at least for now. 

In order to make the most of that balance and seek out a top sale price, Mr Nair said concentrating on the most cost-effective presentation elements is key. 

"My advice would be not to overspend on renovations in terms of money and time. Focus on presentation and minor improvements, then list right now in the current market rather than waiting six months for major renovations," he said. 

Strong marketing is still as crucial as ever, according to Tristan Tomasino of Buxton Inner West in Melbourne.

He explained that the best performers are "homes that are well presented and are very appealing from a marketing sense — so vendors haven't cut corners on trying to save money on marketing."

The other critical decision comes down to agent selection, as stressed by Tony O'Doherty from Belle Property Bulimba in Brisbane. 

"It's so important now that when you're going to market you need to be fussier than ever and more selective than ever with the agent that you're hiring," he said. 

"You absolutely need to be speaking with the top three performers in your area and hiring the one that they feel that you can work with the best.

"In last year's market, people were going for cheaper options. The cheaper options were more expensive in the end, but today you need a very good negotiator and you need a good marketing approach."

1. Proptrack, 'Your weekly PropTrack digest - Economist Update' email, 24 February 2023

2. Domain, 'Real Estate Auction Results', 7 March 2023
https://www.domain.com.au/auction-results/