Real estate tensions hinting at easing in mid-October

Pete Wargent, the co-founder of Australia’s first national property buyer’s agency network BuyersBuyers, said the Reserve Bank’s aggressive approach to rate hikes “knocked the stuffing out of the housing market”.

“There hasn’t been a tightening cycle of this pace and magnitude since 1994 – when the cash rate target went from 4.75% to 7.5% between July and December – so most young borrowers have never seen anything like this before,” Mr Wargent said.

“And it had had a very significant impact on consumer confidence”.

The RBA board’s decision to lift rates earlier this month by only 25 basis points defied almost all expectations and had something of a “soothing impact on buyer confidence," he said.

“Although there will likely be further hikes to come, it does add to a general feeling that we are getting closer to the terminal cash rate target for this cycle,” Mr Wargent said.

“There are several other indicators that the Australian housing market is beginning to stabilise and confidence is starting to rise,” he said.

All of this leads the property guru to declare: “We’ve passed peak fear.”

The REA's four interpretations of the key signs of a property slowdown are: Healthier clearance rates than expected; Worst price fall fears haven’t eventuated; Migration likely to increase demand; Interest rate uncertainty easing.

Many buyers in Sydney are ready to or are entering the property market now.