Property Report - October 2019
Have We Missed Spring?
It is amazing what a change in the seasons can do. As soon as September starts it is almost as if the early buds on our trees are reminding us that winter is almost over. And although the chill of winter will still hold it’s icy grip for a few more days, it is expected that the warmer weather will hit fast. So if it is to be a short Spring, what is to be expected? How has this new market changed since 2018? There has been monumental change, so let’s recap:
- Assessment rates have been reduced to around 6% when they used to be 7.25%.
- The Reserve Bank have cut the cash rate to 1% which has assisted in reduction in investment and principal home loans. Economists are predicting another 0.25% cut before the end of the year.
- Lending for some large banks is almost as low as 3.3% with deposits up to 30%.
- The First Home Owner Regional Grant still provides a $20,000 cash incentive available until 2020 as well as stamp duty exemption up to $600,000.
- Volume builders are offering competitively priced packages to bolster interest for the remainder of 2019.
- Auction clearance rates sit at approximately 77% with healthy stability across metro and regional Melbourne.
These 6 key points have prepared the market for a banner season, so now it is up to Joe Public. So if the market has remained steady with price correction generally less than 10%, what could happen in Spring? If First Home Buyers confidently enter the market again after a decline in numbers over the last couple of years, some will have saved more than 20%, this will give them strong buying power. If small business owners with families are looking to invest or buy their second home and have their financial documents and statements ready with their brokers, they will also be ready to make a move. If retirees didn’t buy in the peak season of 2017-2018 they have been monitoring the market ever since that time and may be looking to make their tree change as well.
So what will be the deciding factor? Ultimately it comes down to the old rule; supply vs. demand. We have seen this time and time again, through different markets and varied types of properties. If you’ve got 1 buyer looking at 5 properties the choice is theirs. If you’ve got 5 buyers looking at 1 property their options are limited.
For our Purchasers in the region, we encourage you to consider what is truly important to you and your next move, don’t wait for something better assuming there will be an influx of 1 type of property, there may not be.
For our Vendors, remember that there may be other properties come on the market similar to yours, but that is ok. Being in a low density area means there will always be limited comparable properties, and when it comes to a Purchaser obtaining finance, comparable sales are very important.
This Spring is going to be a big one. It will be full of activity and energy, warmer weather and beautiful gardens, longer days and weekend getaways. So even if 2019 is not your year to make a property change, just enjoy it. Get out there with the family and take advantage of the time you have, which like Real Estate, is a commodity in itself. Don’t miss the promise of Spring and what it holds for you.