2020: a year in review
It’s hard to believe that we are coming to the end of another year when, in many ways, it feels like we are still just starting 2020.
The Melbourne property market has experienced a number of ‘firsts’ this year. Some of the bigger firsts include:
- first total lockdown (no physical inspections)
- first only ‘one on one’ inspections
- first ban on public auctions
- first ‘online’ auctions
The media sensationally suggested the market would crash, anywhere from 10%-40%, depending on what you were reading.
We didn’t see it.
Many Melburnians remained confident to both buy and/or sell.
The good properties, with realistic vendors, saw continued strong results. Our auction (when they returned) clearance rates were consistently above 70% and the last two weeks have been over 80%.
We saw a number of new buyers enter the market. Our forced lockdowns, for those lucky enough to remain employed, resulted in incomes being saved and not spent. Overseas holidays were cancelled; in fact, nearly all holidays were cancelled. Less money was spent on food and entertainment. Forced savings perhaps, but the results were the same and, for some, the savings were enough to take that first step into the property market.
Not everything sold though. A number of vendors (many with homes that came with some challenges) campaigned in search for a ‘dream’ price, well above the market, and will no doubt have some time over Summer now to reflect on whether they want to remain in their properties for 2021 or meet the market and move on with their lives and plans.
What does this mean for 2021?
We believe the 2020 year has resulted in buyers making more considered choices around where they want to live and how the house will work for them. Changes to lifestyle, including working from home, have identified some flaws in the modern floorplan. While open plan is good, breakaway rooms offering privacy and silence for meetings/calls make it much easier for larger families living under the one roof.
We are hoping the recent results will encourage more vendors to sell. If low numbers remain, it is likely the supply/demand scale will also remain, with demand, particularly for the good ones, resulting in competitive auctions and strong results.
Being optimistic, for younger/first home buyers, we may see an increase in properties in the second quarter. New tenancy legislation (postponed during Covid) is due to come into effect from 29 March 2021, with some changes around mandatory requirements for homes being tenanted. Depending on the condition of homes, some vendors may opt to sell their properties rather than undertake works to make them compliant, providing more choices for buyers.
In general, though, unless we see more instability, the market is likely to take off where it has finished up.
As an Independent service which prides itself in only offering Buyer Advocacy real estate services, our best advice for buyers as they start their search in 2021 is be prepared. Have a plan and have your finances sorted, because if the right house comes up, it would be a shame to miss it because you weren’t prepared.
We would like to take this opportunity to wish you all a very Merry Christmas, a wonderful break with your families and a safe entry into the New Year.