As the property market is now experiencing its 6th lockdown in Melbourne we have a good understanding of buyer's behaviour in the various property segments. Overall the property market has remained surprisingly robust lockdown after lockdown.
There is no question the owner-occupied purchases have slowed as most buyers will not purchase a property of significant value to live in, sight unseen. There is always an exception to the rule though and some owner-occupied sales are still taking place. Potential development sites and knockdowns for new homes are in very strong demand as buyers do not need to inspect these properties and can do their due diligence online with many public websites. Off the plan sales of owner-occupied properties in sought after locations are also still in high demand.
As the linked article below from CoreLogic states: The August update takes Australian housing values 15.8% higher over the first eight months of the year and 18.4% above levels a year ago. In dollar terms, the annual increase in national dwelling values equates to approximately $103,400, or $1,990 per week. In comparison, Australian wages are rising at the average annual rate of 1.7%.
Strong selling conditions can also be seen in auction clearance rates and private treaty measures. “Auction clearance rates have trended lower, especially in Melbourne where a large proportion of auctions have been withdrawn from the market. However, where properties have proceeded to market, the large majority are recording a successful result, albeit with a large proportion selling prior to the auction rather than under the hammer,” Mr Lawless said. Similarly, the median number of days it takes to sell a property is showing a mild upwards trend, however, most cities, including those navigating extended lockdowns, are continuing to see homes sell in 30-35 days or less. At the same time, vendor discounting rates remain at record lows implying most vendors aren’t budging much on their initial pricing expectations.
Also linked below is an article from domain.com.au: Lockdown knockdowns: the Melbourne properties that are most popular during inspection bans - 'Prices for houses sold for land value were skyrocketing, with land-value homes selling for as much as a renovated houses under the virtual hammer.'
What we also know well from previous lockdowns is the floodgates open immediately when we are all free to move about with a flurry of activity as buyers frantically inspect properties and making offers. I have no doubt we will see the same in the coming weeks once one to one inspections are again permitted in Melbourne. It's a great time now to get yourself prepared for this opportunity if you have plans in the back of your mind to either buy or sell a property.
Until next month, I trust all your news will be good news. Yours in real estate, Scott Banks