With part of the traditional spring selling season experienced in lockdown, we still seem to have a few legs left in the Melbourne property market.
The fundamentals remain the same - people need somewhere to live. If anything, the past 20 months have shown us that often our existing home is not adequate (not enough/no outdoor space, no place to home school, work from home or dedicated study), so there has been a shift to homes offering those spaces. It's why there has been such a bump in prices, both in the outer suburbs and regional. People not shackled by having to be close to the
CBD, are now happy to be moving further out. With prices based on supply and demand, it makes sense for prices to then go up.
Downturns happen when there is a change of some sort. The various regulatory bodies and the government often have a hand in this. The latest is APRA tinkering with lending and raising the percentage base rate for serviceability. Is it going to have a major effect? Time will tell.
At the moment, I'm not seeing a massive change in buyer behaviour. Last weekend we sold a 1 bedroom apartment in Fitzroy (albeit 60m+ in size, but with no parking) for over $100,000 past the reserve. I don't think the need of buyers to buy has yet been stifled by the APRA changes, but that could well be due to those folks having existing loan approvals in place. When it comes time to have to go back to the bank, the story might be
Whilst money is cheap (low interest rates), I still think there is buyer demand and a shortage of homes for sale. Low stock and high demand equates to prices holding firm, if not continuing to rise. If people cannot borrow as much as before, I still believe they will buy, just at a lower price point. So the various price points in the market will hold. If people end up not being able to access money, then that is what would likely take the
steam out of the market.
I do only work with clients buying/selling in metropolitan Melbourne, so that is the market I watch most closely. Regional may well do something different entirely.
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