Property sales plummet by almost 40 per cent as interest rates rise

December 13, 2022

Rising cost-of-living pressure is taking its toll on the property market with sales plummeting nationally in the past 12 months.

The latest data from property experts InfoTrack reveals a national drop of 39.4 per cent (%) in e-conveyancing transactions between November 2021 and November this year.

Cost-of-living concerns are being blamed for dousing the red-hot post COVID-19 property market.

InfoTrack Global Head of Property John Ahern cited accelerating inflation and interest rate rises – coupled with stagnant wage growth – as the major factors behind the growing perception that it’s a bad time to buy and sell.

“Our figures show buyers and sellers have become increasingly pessimistic in the past 12 months as Australians worry more about inflation and the broader economy,” Mr Ahern said.

“It would seem more people are waiting for certainty and stability about what potentially lies ahead – especially when it comes to interest rates, which are having a tremendous impact on their day-to-day lives.

“Our data shows the lag kicking in from May, in the wake of the Federal election and when the Reserve Bank of Australia (RBA) lifted the cash rate from a historical low of 0.10% per annum to 0.35% per annum – the first-rate increase since November 2010.

“Since then, the RBA has announced seven more rate rises in as many months (four 0.50% increases, three 0.25% increases), taking the cash rate to 3.10% per annum on December 6,” Mr Ahern said.

InfoTrack found in the year to November:

Victoria sales dropped 40.8%
New South Wales sales dropped 38.3%
Queensland sales dropped 40.5%

Mr Ahern said October this year had been InfoTrack’s “worst month for property buying activity” since the raft of interest rate rises.

“Due to the consecutive month-on-month effect of the rate rises, we’re seeing a more significant weakening of consumer sentiment when it comes to the housing market,” he said.

“Clearly economic concerns are weighing on the minds of potential buyers and sellers.”