Warrnambool real estate agents say hot market is slowing down amid rise in cost of living pressures

Latest data from the Real Estate Institute of Victoria shows Warrnambool's property market is slowing down.

A house listed privately took four more days on average (31) to sell during the month of May in comparison to January this year (27).

A total of 12 houses sold at auction in the past month compared to 14 in April.

Brian O'Halloran and Co director Brian Hancock said he'd never experienced such a hot market in four decades but inflationary pressures were "destabilising" it.

"I'd never seen anything like it in 42 years," Mr Hancock said.

"The peak's gone off but we're still up there ... I don't think the buoyancy can hold forever.

"The world's going through a destabilising period. It's here, there's a culmination of things that have caught up to us now and (it'll come down to) how they're addressed.

"You think you can predict it, but everything's so vulnerable at the moment you can just see it bubbling underneath.

"It's a wait and see period for real estate agents."

He said residents should expect increased interest rates.

"I expect you'll see more interest rates rises before next Christmas, it's not going to stop," Mr Hancock said.

"If people aren't in a good position to manage it then that's where the domino effect will happen."

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Stockdale & Leggo Real Estate director Matt Northeast said first home buyers were no longer jumping to snap up houses.

"The first home buyers are deliberating longer," Mr Northeast said.

"People aren't rushing in as quickly as they were. It's not affecting prices, but people are taking longer to make a decision on properties. The results for vendors are still very strong, but the inquiries are not as strong as they were three months ago."

Ludeman Real Estate director Mark Dwyer said he could see homes taking longer to sell.

"There's no doubt with the cost of living going up and interest rates increasing, it will have an effect on the real estate market," he said.

"We personally haven't seen anything yet, the market still seems buoyant, we've still got a listing shortage and until that dries up for real estate agents I think it's still going to be fairly active.

"Interest rates for our market are the big key - they're talking they're going to go up again possibly next month. From the public's point of view they'll start to see more properties on the market, they're not going to sell in two days like most of them have been.

"At the moment the demand is outweighing the supply but if that changes the public will soon know."

Harris and Wood real estate agent Danny Harris said there was less competition.

"There isn't a bidding war on every property whereas in the last few years there has been," he said.

"One of the things I'm finding is if you've got property with a uniqueness about it and there's very little supply, it's still a market where you'll be competing against a number of other buyers to secure it.

"If it's a property that's oversupplied or lacks the wow factor then there are fewer bidding wars on those properties."

He said inflation likely meant further rent hikes.

"I can certainly see a scenario where unfortunately the average rent price will rise," Mr Harris said.

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