THE MARKET AS IT STANDS
We are now in the heart of Autumn with cooler weather and the wood heaters burning. Looking back on the March to April period we saw a significant drop in activity around the Easter and school holiday period. This is a huge contrast to March when the volume of sold properties had been the highest on record. So why such a change?
It is fascinating to observe populations move in accordance with public holidays, school terms and periods of work. We rearrange our living arrangements with the ebb and flow of these dates in the year. The year of 2021 has been the last leg of a race for vendors and buyers who have been in the market since November 2020. April has been everyone’s much-needed break. This in turn slows the momentum down, despite there being solid enquiry across the board leading up to winter. This dips and falls are important for the cycle of the year.
Across Melbourne the auction clearance rate for this time sits around 65% with just under 1000 homes selling each week. As these numbers have remained steady with the Melbourne Metro average hitting $1,000,000, the data suggests a strong balance of supply and demand with the right amount of properties turning over. It is expected that there will be a slight increase in listed investment properties between Autumn and Winter, which will provide further options for the first home buyer sector. We have discussed before the limited number of investors in the market, who are nervous about revised rental laws. But there will be a resurgence in the investor market again once they are better understood, as the new rental laws are positioned to create an equal and safe system for all. It is only natural – any big changes to law take time.
Nearing the end of the financial year we expect to see people reviewing their current financial situation and make a plan for the next 6 months. And with the First Home Owner grant ending and the 5% deposit scheme rolling over into the new financial year, young home owners will continue to focus on purchasing, especially if they have missed out during the first quarter with the increase in competition in the marketplace. What remains popular are affordable first homes in townships, 4 bedroom homes on large allotments for families, small acreage properties for buyers looking to upsize, and broad acreage farms in the surrounding district. Balance of supply and demand paired with competitive pricing strategies for properties seems to be the key in generating interest and a high price within quick succession. The regional sector still remains strong given the current mean average pricing through metro Melbourne. The market has shifted toward benefiting an upsize move, and not necessarily a downsize move. Those looking to move further in than further are having to sacrifice more for convenience, which in turn is encouraging them to stay longer.
The economy is on track to continue to bounce back with increase in spending across the board and more families taking advantage of driving holidays. Overseas travel might be off the cards for quite a while until there is more confidence in adoption of a vaccine, so the general focus for the population is where they live, what they’re doing, and where is their next holiday. Wishing our clients and community all the best during this season and we look forward to updating you next month.