As Melbourne starts to relax its strict stage 4 COVID-19 restrictions, the Melbourne property market has, once again, seen a surge in buying interest. This is not unexpected, given that the Melbourne property market has just emerged from its forced 3 month hibernation. What does this mean for the Melbourne property market? How will this impact the Melbourne property market?
What should you do, if you are looking to get into the property market? Savvy property hunters were buying throughout the lockdown. Should you have bought? Is it too late for you?
The story so far
Just like any other states in Australia, Melbourne property market sprung back to life after the General Elections in 2019. Buying interest was strong, and house prices grew. Unfortunately, COVID-19 got into Australia, and the spikes in COVID-19 infection numbers triggered lockdowns across most parts of Australia.
Melbourne wasn't spared. If anything, Melbourne was one of the worst hit cities, and we suffered 2 lockdowns. Real estate inspections were banned in the second lockdown, and the real estate market was put on induced coma for 10 weeks, to limit people movements. Sales were, however, still possible. But with most buyers not willing to buy any properties without physically seeing and touching them, there isn't a lot of property transactions in the 2.5 months.
Only a handful of properties were transacted, and we are pleased to acknowledge that one of our clients managed to secure an investment at 20% under market value, through our property buying service. A savings of close to $200,000!
Melbourne Property Wrap-up Jul-Sep 2020
If you recall our July 2020 update, we've predicted a rather stagnant property market in the July-Sep 2020 quarter. When doom-sayers and so-called market experts predicted a fall of 40-60% in Melbourne, we've forecasted a price fluctuation of between a window of (+/- 2-3%). We were laughed at, and ridiculed. But we trusted our market analytics, and stood by our forecast.
The verdict is out. Have a look at the the infographics released by Corelogic in Oct 2020 above.
Prices in Melbourne over the quarter, fell 3.3%. Our forecast were almost spot-on. It was 0.3% off, not 10 or 20 times off the mark.
What's going to happen in the Melbourne Property Market for the rest of 2020?
The property market outlook for Oct-Dec 2020.
The property market outlook for Oct-Dec 2020 is going to be exciting. And exciting is an understatement. It can probably be described as "EXPLOSIVE" in some market segments.
We're forecasting a potential 10% surge in house prices in some areas. And up to 20% in some segments of the market. Why so?
Oct-Dec 2020 is the traditional real estate buying season in Melbourne (and most parts of Australia, really).
Pent-up demand from the strict lockdown. Finance-ready buyers, especially first home buyers who had been locked out of the market during the lockdown, are rushing into the market.
Low stock. Seriously low stock level. Many home vendors had been holding off selling their properties, in anticipation of the 40% drop in prices which never happened.
Low Stock, Strong Demand. The supply and demand has tilted strongly in favour of sellers. Since the restrictions were relaxed 2 weeks ago, we're seeing buyers willing to pay $100k-200k over the price guidance for good properties. The FOMO (Fear of Missing Out) monster is definitely coming back into the market.
This, combined with first home buyers rushing to take advantage of the various first home buyer incentives, such as first home owners grant, first home loan deposit scheme, and the home builders grants, for first home buyers, meant that new or newish properties priced within reach of first home buyers will be snapped up pretty quickly. We've already seen properties being snapped up, at over 20% more than the price guide. These are properties which we have told our clients to "stop chasing".
However, the same cannot be said for some segments. Prices in working class suburbs are not likely to enjoy such growth. They are likely to enjoy a much smaller grow in prices of around 3%.
What is a good deal in the Melbourne property market? What are the good areas to buy into? It depends on what you are buying, where you are buying and why you are buying.
There are some good areas, and some better areas to buy into. Have a chat with us, to discuss your personal situation.
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