by Floris Antonides | Aug 20, 2018 | Property Market Updates
Welcome to our latest snapshot of what has been happening in the Victorian property market.
As I mentioned in last month’s Update, the real estate market has certainly ‘taken its foot off the accelerator’ in 2018, with slight decreases in median prices evident in some areas and price brackets.
However, that does not mean the market has completely ‘hit the brakes’ either. In fact, you may have noticed that Melbourne’s weekly auction clearance rate seems to have levelled out in the low 60’s recently which, when you look at historical records, is generally considered to be indicative of a balanced property market. In conditions like these we tend to find that the large majority of vendors who are realistic in their expectations tend to achieve a successful sale within a reasonable time frame.
One thing you do need to pay particularly close attention to in a market like this is choosing the right method of sale. Whilst some areas of Victoria have tended to automatically choose the auction method, particularly over the past couple of years, we are advising our clients to give this decision a great deal more thought at the moment. There are several options available that are producing good results when dealing with the current thinner buyer pool.
What many home owners don’t seem to have realised yet is that in a balanced market there are always segments of that market that tend to do better than others. For example, if you are selling in an area or price range where first home buyers are active, you should find that a good result is quite likely. Similarly, we are seeing a real step-up in activity from downsizers who have been encouraged to make a move now that new Government incentives to assist older Australians came into effect since July 1stthis year.
Another important factor for anyone considering selling in 2018 is that if you would like to take advantage of the early Spring market, the time to start preparing your property is right now. History has shown that many of the strongest results of the Spring market will be achieved in September, prior to the AFL Grand Final. This is usually the period when buyer numbers are at their highest, and stock levels are still tight. As a result, increased competition between buyers tends to push sale prices up.
In contrast, if you leave your sale to the end of Spring, you are more likely to face increased competition from other sellers as more property becomes available. If you want your property to be on the market when conditions for sellers are at their best, (and then be ideally placed to make the most of buying opportunities as a cashed-up buyer who has already sold their property), then the window of opportunity is not huge.
Please keep in mind that our Advocates are a great source of experienced advice when it comes to deciding what to do in order to make the biggest impact on potential buyers, (and how to avoid spending money on changes that will have no impact whatsoever). So, feel free to call on that advice if you are considering a sale.
Best wishes,
Floris Antonides
by Floris Antonides | Jul 9, 2018 | Property Market Updates
There has been a great deal of commentary in the media recently about what is, and isn’t, happening in the Victorian property market in 2018. Some of it has been quite well informed, but a large part of it has been well off the mark, focusing on scare-mongering rather than providing accurate analysis and information.
With this in mind, I thought this would be an opportune time to provide you with an overview of what is really happening for those who are buying and selling property right now, based on our ‘hands-on’ experience.
Firstly, rather than sugar coat it, I want to state quite clearly that the market has become tougher as the year has gone on. From the perspective of our team of Advocates, property values seem to have softened around 5% from the peak that we reached around the middle of 2017. In some areas, that decrease has been a little more pronounced, but in other areas there has been almost no detectable drop at all…more of a levelling out if you like. In general, suburbs and price brackets where first home buyers are most active have fared best, whilst the top end of the market has presented the greatest challenges in retaining values.
Having said this, it is also clear that whilst the overall market seems to have passed the peak in its most recent period of growth, there are still a number of opportunities there for sellers. We are very confident that the current shortage of available property on the market has minimised the impact of softening prices in many areas. This is likely to continue throughout the remainder of Winter, but you need to be aware that these softening conditions could well be emphasised once the annual surge of new listings begins at some point in Spring. Thus, if you plan on selling, our advice would be to do it sooner rather than later!
The upside to these changes in the market is that now is a fantastic time to be upsizing. The decrease in prices means that the gap between the price you are paying and the price you are selling for has also dropped, essentially making the transition to a bigger home more affordable. The other side of the equation is that those sellers who have been waiting to downsize, (but have delayed that decision whilst their property continued to increase in value), should at least consider making that move sooner rather than later.
Make no mistake, some sellers are still achieving outstanding results, but getting good advice when selecting your agent then having a trusted advisor by your side once the campaign gets under way has rarely been more valuable.
We are receiving many calls from people with their property already on the market who are experiencing real challenges, often because of a poor choice of strategy or agent. A market like this is one where your choice of agent can have a profound impact on your result, particularly if you are dealing with someone who has not actually experienced market conditions like this before. The ability to manage a campaign where there are only one or two interested parties and to negotiate effectively in that situations, is just as important as their ability to maximise your inquiry levels through a well-structured and carefully targeted marketing campaign.
If you are considering selling in 2018 and would like some experienced advice on how to maximise your result, don’t hesitate to give us a call.
Best wishes,
Floris Antonides
by Floris Antonides | Jun 8, 2018 | Property Market Updates
Mother Nature has provided us with a timely reminder over the past few weeks that Autumn is now behind us, with the Winter property market officially getting under way this coming weekend.
The change of seasons has certainly seen a change in the market place, so I thought this would be an opportune time to look ahead and see what the next few months are likely to bring us.
If you’re a keen observer of property market statistics, you will already be aware that the published auction clearance rates have been tracking at a lower level this year. We also need to keep in mind that a substantial number of auction results are not being reported. As a large majority of unreported results are non-sales, the percentages may be even less impressive than they first seem. However, it is also worth remembering that any comparisons with results during 2017 or 2016 are unrealistic, as those markets were recording historic highs. What we are seeing right now is more of a return to ‘normal’ market conditions, rather than a cause for real concern.
What has become clear is that we are now in a market where vendors need to be responsive to the prices that buyers are prepared to pay if they wish to sell. This is a market where agents who provide poor advice or who are not monitoring market activity closely will be found out very quickly. Those vendors who make the mistake of dealing with an agent who simply “tells you what you want to hear” to win your business will pay a price, both in time and financial expense.
It is certainly not all doom and gloom though. As some of our recent results have shown, there are still some fantastic prices being achieved…perhaps not quite at the same levels as we saw late last year, but we are only talking about a few percentage points at this stage.
So where is the market headed? Some Victorians have a real misconception about selling in Winter, as this is the time of year when the seller reaps the largest benefits from a limited supply of available property. There are still good numbers of motivated buyers in the market right now, and we expect this situation to continue for the next few months at least. Therefore, we expect the Winter of 2018 to be a good one for most sellers.
Looking further ahead, if we continue to see a tightening in lending as well as a steep increase in supply (such as we often experience at the start of Spring) we may experience a market where today’s prices are hard to maintain. Of course, the largest impact on buyer confidence will depend on the media coverage of the market, and if the usual scare-mongering associated with the lead up to the State election in November also impacts on buyer confidence, we may see some softening in the market. Only time will tell.
With all these factors in mind, our recommendation to anyone considering a sale is to consider making that move sooner rather than later, as long as it fits within your plans. Don’t forget that you can give our team a call at any time if you have any questions about the current market in general or your own property plans in particular.
Best wishes,
Floris Antonides
by Floris Antonides | May 21, 2018 | Property Market Updates
Now that the Easter break is behind us, the property market can look forward to a relatively uninterrupted run for the rest of Autumn, with the Queen’s Birthday weekend in June our next scheduled long weekend.
This will be good news for home sellers, as the past month has a period affected by school holidays, the Labour Day weekend as well as Easter.
Despite these distractions, the Victorian property market has experienced a relatively steady month. Auction clearance rates are still down a bit, particularly when compared with last year’s remarkable figures, however the good news for sellers is that the rate doesn’t appear to be dropping any further as the year goes by.
Indeed, assuming that the supply of new listings begins to slow as it usually does as we get closer to Winter, we may even see the clearance percentage begin to improve a little. This will occur if demand remains at its current levels and buyers are forced to compete more strongly for the limited stock available.
That said, we may see a short spike in the number of listings hitting the market this week, as there will inevitably have been some vendors who have held off making a move until the school holidays are finished. We might even find that buyers have a few extra reasons to smile through the remainder of April.
As we touched on in last month’s Update, the decline in auction clearances along with increased variations in the market strength of different areas has made the agent selection process even more important. In a market where you may need to make judgements about the strength of an offer prior to auction, or to negotiate with buyers after auction if the bidding does not reach your target price, your agent’s ability to negotiate one-on-one is of increasing importance…one more reason why having an independent Vendor Advocate by your side when selecting your agent is so important.
On the economic front, there appear to be more signs that the majority of home buyers remain confident about any potential interest rate movements in the foreseeable future. One of the major mortgage broking firms recently reported that the proportion of borrowers choosing variable-rate home loans has been rising steadily in recent months. With the Reserve Bank leaving the official cash rate on hold at 1.5% yet again this month, borrowers are clearly not feeling any pressure to fix their mortgages just yet. Indeed, as recently as this past week, the Governor of the Reserve Bank has stated, “The Reserve Bank Board does not see a strong case for a near-term adjustment in monetary policy”.
Overall, it seems that we are heading into a market where results will be more predictable, but where the occasional strong result is still possible with the right strategy and skills. So if you would like any help navigating your way through what is becoming an increasingly complex property market, feel free to call on the team at Floris Antonides Vendor Advocates.
by Floris Antonides | May 7, 2018 | Property Market Updates
According to a new survey into home buyer activity, the number of people who go straight to their existing financial institution rather than shopping around for a home loan is dropping, but probably not as much as you might think.
The figures from CoreData Research on behalf of one of Mortgage Choice, a major Mortgage Broker, indicate that the proportion of consumers who went directly to their current financial institution for a mortgage has decreased from 60.7 percent to 44.2 percent.
Mortgage Broker usage
What might surprise many readers is the fact that this survey found that the percentage of homebuyers who went straight to an independent mortgage broker as their first source of a loan when looking to purchase a home or investment property has risen to 28 percent from 16 percent last year. It’s an improvement, but in our opinion still surprisingly low.
As recent figures have reminded us, the Banks have a tendency to offer their best deals to new customers rather than loyal long-term customers. So not asking an independent mortgage broker to source the best possible deals, even if it ends up being from your current Bank, can be a very expensive mistake.
How can a Mortgage Broker help?
Today’s competitive mortgage market can be a daunting place for those who are unfamiliar with the process of searching and applying for a home loan.
Here at Floris Antonides Vendor Advocacy, we have found that using an independent Mortgage Brokers can not only save a home buyer time and unwanted stress, but a good broker will often be able to find you a loan that not only saves you interest, but also has the specific features that meet your individual requirements in facets such as offset accounts, extra repayments or reduced repayments if you have a change of circumstances.
In addition, a mortgage broker will be there to provide guidance and assistance during the loan application process, from the initial application through to approval and settlement day…a bit like one of our Advocates when you’re selling.
If you are wondering about finding the right home loan as part of a plan to sell and move on, don’t forget that our free booklet, Fatal Real Estate Traps Exposed, could save you a great deal of time, money and stress during the sales process. So why not download a copy while you’re here?
by Floris Antonides | Mar 27, 2018 | Property Market Updates
Our Update for March comes at an interesting time in the Victorian property market.
An analysis of the results that agents have been achieving so far in 2018 shows that there is a divide in the way the market is performing, depending on the location and price range of your property.
On one hand, properties in the outer suburbs and those in the lower price brackets are continuing to attract strong buyer competition in most cases. This trend is also apparent in the regional areas of Victoria, with the REIV reporting that average selling times for property outside the metropolitan fringe were five days shorter in February this year than they were for the same period last year. That’s quite a step up considering that 2017 was already a strong year for the Victorian market.
However, what has also become clear is that properties closer to town, and in the higher price brackets, are tending to find it tougher to attract the level of competition we were experiencing six to twelve months ago.
This slight softening in demand has also been reflected in the auction clearance rates so far this year. Whilst the published figures showing clearances of 65-70% may seem reasonably strong at first glance, it is important to keep in mind that there has been a higher percentage of ‘unreported’ results this year. In most cases, these non-results are passed-in, so when you add them to the reported numbers, it is clear that there are less properties being sold under the hammer than there were at this time last year.
This change in the market is particularly relevant when it comes to selecting the right agent to handle your sale. Whilst the market last year was one where most auctions saw multiple bidders competing strongly, there is now a growing focus on the agent’s ability to negotiate one-on-one with buyers, both prior to auction day in some cases, and immediately after the auction in others. This is one more reason why having an independent Vendor Advocate by your side when selecting your agent is so important.
On a positive note, the past month has also seen a change in the outlook on interest rates. As we all know, interest rates have been a powerful influence on our property market in recent years. So, whilst the Reserve Bank decided to leave official interest rates on hold again this month, it has been interesting to see the banks cutting rates on several mortgage products.
For those that may have missed this news, the Big 4 Banks have all reduced their interest rates on several of their fixed rate loans during March, with cuts of up to 0.5% being offered on loans of 2, 3 and 5-year terms. We have also seen at least one of the Big 4 introducing discounted rates just for first home buyers.
The reason these moves are particularly important is that most commentators feel that the lenders would not be locking themselves into these rates unless they were very confident that the RBA will not be raising official interest rates for quite some time. That level of confidence, along with the overall reduction in interest rates, can only be a positive for the property market overall.
If you would like any advice or assistance in navigating your way through a property market that is becoming increasingly complex when it comes to maximising your result, don’t hesitate to give Floris Antonides Vendor Advocates a call at 0418 504 915.
