A dormant market with signs of a strong spring selling season.
The Expatriate Property Specialist, Lauren Staley, Managing Director of Infolio Property Advisors, shares her insights about the upcoming Spring Market.
The Melbourne property market goes dormant during the winter school holidays, particularly for family homes in blue-chip suburbs. There are only two times in the year when the market is quiet, now and in January. While some new properties have hit the market recently, most of the properties we are looking at are off-market or pre-market. With many sellers planning to sell during the spring, pre-market opportunities are increasing. As a result, many buyers we speak to want to hold out until spring, hoping for more options. While there might be more stock, there will also be more competition.
There are many active buyers in the market now. Auction clearance rates in June stood at 72%* (compared to 53% last year) despite two interest rate hikes in May and June. This is driving property values to the levels seen in December 2022. They are yet to reach the peak observed in February 2022 but are following a slow growth trajectory.
With a property management portfolio of over 700 properties, we have a good understanding of the investment market, and one of the trends we are seeing is an increase in investors wanting to sell their properties due to increasing interest rates and land tax. We expect this to take full effect in the spring selling season, posing a good opportunity for new investors or those wanting to expand their portfolio. Many people are opting to sell their investment properties due to cash flow issues. However, the future for the apartment rental and sales market looks bright. There will be an upside for those that can hold their properties through to next year. It is important to remember that whilst interest rates don't forever stay low, nor do they forever stay high. For more tips on buying the right investment property in the right location, read this month’s market insight article here.
The number of Australians falling at least 30 days behind on their mortgage payments has significantly increased. This has primarily driven the sale of investment properties, holiday homes and properties in mortgaged suburbs (i.e. Melton, Bacchus and Wallan). However, with more fixed rates coming off over the next two months, this trend will likely impact the blue-chip areas we service in September and October of this year.
Vendors with properties on the market or plan to list soon will benefit from the Reserve Bank's decision to keep interest rates on hold at 4.1% in July. With limited competition, vendors will be able to capitalise on the increased buyer confidence driven by the hold-on rate hikes.
My parting piece of advice.
If you’re considering selling your property, it’s time to get it on the market. Supply is low, and demand is high. It's a vendor market, but it won't be for long. We expect the stock levels to increase in the spring selling season and supply and demand to balance.
If you plan to buy or sell in the next six months, get in touch so we can help you plan the best strategy to maximise your sale price and negotiate a competitive buy price. Contact us today for a free 15-minute discovery call, and we can advise you on the best path forward.
Lauren Staley
Managing Director
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