The number of purchasers in the market today is the same as last year’s boom. The  difference is that at the moment, most are inactive, but they haven’t disappeared.

Economic uncertainty is a big reason for this inactivity and the Reserve Bank’s month to-month rate reveals are a major contributor. Some purchasers have been frightened  into inertia.

For a purchase as significant as a property, people crave confidence. The recent  increases in interest rates are having the expected result but the unclear picture of how  high rates might actually go is damaging this confidence.

Additionally, international events such as the war in Ukraine and its effect on the price  of everyday commodities has further eroded confidence.

The market, including prices, are driven by purchasers with access to money in  competition with each other. In times when the purchaser cohort is inactive, like we’re  experiencing now, pressure on prices will ease.

With prices dropping some purchasers are adopting the wait and see approach.

They can remain inactive or they can progress their plans at a time when competition is  minimal. Indeed, many of those buyers who are active at the moment are finding value.
Some vendors are hesitant to take their property to market due to fear of less  competition. I suspect that will change as we enter the spring selling season.

Next week the Reserve Bank will increase rates. The only unknown is by how much.

We all understand interest rates are going up, and that budgets will be impacted. But  the market craves increased certainty in this area instead of everyone holding their  collective breath each month.