A few weeks on from the federal election and with an interest rate cut thrown in for good measure, it seems that there is some confidence returning to the Melbourne real estate market.

Agents I've been speaking to have said that they're seeing more hands going up at auction, with clearance rates lifting and some properties performing well. It's still a case by case basis, regarding which suburb we are looking at, the type of house and probably most tellingly, the price point.  Homes under $1M and particularly homes in the first home buyer bracket appear to be fairing the best. But preliminary indications are that there is more buyer confidence out there overall.

I've been out and about hunting for homes for clients around Preston, Coburg & Reservoir and certainly those areas appear to be a sweet spot on price right now for buyer activity.  Two auctions I attended had five and three bidders respectively. Late last year and early into 2019 agents were lucky to see one auction bid, and often there were zero bidders. Both these homes sold above the quoted guide price as well.

Another home in Reservoir I inspected was a typical three bedroom family home, with just the one owner and held for many years. It was now being sold with very little having been done to the home and some major updates required and significant cracking inside the home.  This home was quoted with a top range of $730K. It sold for $854K. Agents have reported Reservoir prices are moving up and this movement has happened in just the past few weeks.

With many experts out there still saying we are in for a long period of, if not still seeing prices fall, then seeing prices remaining flat, it will be interesting to watch what happens in the second half of 2019.  I'm seeing pockets in Melbourne suburbs where this is most certainly not the case. 

It clearly shows that it pays to intimately know the market you're looking to buy into, or working with someone that does.

Australia’s banking regulator APRA (Australian Prudential Regulation Authority) has announced a proposal to scrap a rule requiring mortgage customers’ lending capacity to be assessed at an inflated interest rate.

Introduced in 2014 as a measure to contain rising house prices and housing investor loan growth, the rule pertains to how a loan is assessed. To allow for a buffer, banks have been required to assess a home loan customer at a minimum rate of 7%.

In fact, some banks were even adding another buffer, to assess a borrower at 7.25%  This is despite interest rates being at record lows.

Under the new proposal, the rate a bank can now charge a would be home loan customer can be lowered to a level determined by banks and lenders.