A RATE rise pause is expected to drive up confidence among buyers and sellers in the Newcastle property market, with strong interest already being shown.
After the Reserve Bank of Australia (RBA) held the cash rate steady at 4.35 per cent on Tuesday at its first two-day meeting, listing agents across Newcastle and Lake Macquarie are anticipating a jump in activity in 2024.
Numbers at open house inspections are up as buyer sentiment increases on the back of predictions that a rate cut could arrive this year after the latest data showed a drop in inflation.
The December-quarter consumer price index revealed inflation is at 4.1 per cent, its lowest in two years and under the RBA's November forecast.
Selling has also been on the rise since late last year, with the number of homes listed for sale across Newcastle and Lake Macquarie in November up 5.4 per cent higher than at the same time a year earlier, according to CoreLogic.
Lyndall Allan, of Salt Property, felt the numbers "sky rocket" at open house inspections last weekend.
"We had 49 groups through one which broke our Salt Property record," Ms Allan said.
"We were averaging roughly 20 groups at our open homes on Saturday and that includes the multi-million dollar listings."
The number of attendees at their open house inspections had tripled since the end of the year, according to Ms Allan.
The level of buyer enquiry had also increased since mid-January.
"Buyers feel like they can make decisions with more certainty and there is definitely more of a light at the end of the tunnel with the chatter of interest rates dropping in the middle of the year," she said.
"That really feeds into buyer confidence, whereas last year we were in the middle of 13 interest rate rises and nobody knew when it was going to stop or how high it was going to go, so a lot of buyer and sellers were sitting on their hands."
Beau Hedley, of TaylorHedley Property, said an uptick in buyer activity was evident after one of his properties in Kotara drew more than 100 groups through the home.
Mr Hedley said the home's low price point paired with increased buyer sentiment led to the astonishing turn out.
"We had 94 groups through the property and another 39 at a second inspection which is the biggest I have seen," Mr Hedley said.
"There has definitely been more confidence with buyers and in the last three weeks, in my opinion, the market has become a little bit more aggressive.
"The volume of genuinely interested buyers is a lot stronger."
Mr Hedley expected the latest pause on rate hikes to encourage more sellers to list their homes for sale.
"With the RBA holding interest rates, you're going to see more people start to come to market," he said.
"After February things typically tend to quieten down, but I don't think that's going to be the case this year."
Is now the time to sell?
Rob and Megan Parkinson are preparing to sell a home they are in the process of renovating after purchasing the weatherboard cottage in Mayfield East at auction in August for $733,000.
Although it was slightly over their budget, the couple anticipated the property market would bounce back in 2024.
"Our agent attended the auction with us and encouraged us to go a little higher than we initially thought to secure it, knowing that the market was going to pick up and that by the time we finished it, interest rates would be a little better and the market would improve for us," Ms Parkinson said.
The couple is set to launch the fully renovated home to the market in the next month.
"We are about three weeks away from finishing," she said.
"I think there will be more buyers in the market in the coming months and generally, the market is pretty strong.
"With the rate situation easing, or at least not going up, hopefully people have a bit more confidence to buy."
Colliers Residential Newcastle listing agent Anthony Merlo, who assisted the Parkinsons at the auction, encouraged the pair to get into the market to be ready to sell in 2024.
"We felt it was going to be far better timing," he said.
"It was predicted that inflation would start winding back but I think even the powers that be have been a bit surprised at the rate that it's rolling back.
"What is more important is that instead of being shell shocked with interest rate rise after interest rate rise, buyers now know that inflation has probably had its back broken.
"Although interest rates will remain high in comparison to 2020 and 2021, they are just going to normalise."
House values in Newcastle and Lake Macquarie recorded a slight rise of 0.1 per cent in January to hold a median value of $872,193.
Relief in sight
In this month's Finder RBA Cash Rate Survey, all 27 experts and economists surveyed correctly predicted a cash rate hold at 4.35 per cent in February.
Graham Cooke, head of consumer research at Finder, said the decision would be met with relief.
"Households have been struggling immensely according to our data, so this rate hold will come as welcome news," Mr Cooke said.
"We're now starting to see a few banks ease rates on some of their fixed rate home loans in anticipation of rate cuts to come - the attitude has certainly shifted.
"If your rate doesn't start with a 5, it may be time to consider your refinancing options."
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