Baby steps, but the Melbourne property market is reopening today.
While we still await a final directive from the REIV (Real Estate of Victoria) confirming the approved activities, the DHHS website says:
Private inspections for residential real estate can also resume with one client (dependants and a partner may also attend) and is limited to 15 minutes. Residents who are living in the home must not be there. The 5km rule does not apply when inspecting a house for rent or purchase. You can only leave your home for a maximum of 2 hours to attend the inspection and you cannot travel into regional Victoria.
We are not expecting to suddenly see vast numbers of new properties hit the net. Conversations with agents this morning suggest associated services such as copy writing, floorplans, staging etc. can also recommence, however, it may take a little bit of time for these properties to filter through.
Having said that, the number of advertised new listings has slowly been increasing. Possibly homes that were prepared for sale and about to launch before the lockdown at the start of August?
This will not be a full opening of the market. We believe the intention is to help stressed vendors (many who had purchased before selling prior to the lockdown) and buyers (particularly those who have recently sold) to transact and avoid possibly difficult financial situations or with nowhere to live.
We expect vendors will have contracts and section 32 statements prepared. Homes could sell after one inspection if the price and terms are acceptable. Buyers should be prepared to act quickly if the home suits.
Prior to the second lockdown, more often than not, homes were being sold subject to finance, sometimes for up to 28 days and with long settlements. Vendors lucky enough to have multiple interest may be more attracted to an unconditional offer or short settlement, even if the price is not quite as high as another offer.
It’s still hard to predict where the market will be when/if it resumes with some sort of normal. If Sydney is anything to go by, The Australian reported this morning that Sydney had 815 auctions on the weekend with a preliminary clearance rate of 74%, although it’s perhaps a tiered market with the strongest clearance rates in northwest Sydney at 83% while the west saw only 63% clearance.
We see our next three weeks being very busy with all hands on-deck, calling agents, inspecting properties and continuing on with virtual meetings with clients – old and new.
Based on the latest Victorian Government announcements, it looks likely that the property market will remain on hold until at least 26 October (cases permitting) when regulations are expected to relax and ‘one on one’ inspections can resume.
Real Estate will still be operating in a restricted capacity when it finally reopens; however, it will at least allow some buyers/sellers, who are no doubt quite stressed at the lengthened lockdown, opportunity to buy/sell.
We think a number of homes could sell very quickly when the market reopens (possibly even after one inspection), as there are a number of vendors who have already purchased and need to sell. The motivation for a seller may also shift slightly and, while wanting their ‘best price’, they may also consider accepting the offer that provides the ‘best result’ – possibly a short settlement and unconditional offer.
There will also be some buyers wanting/needing homes as they have already sold.
For buyers, we think finance approval will be a major key to being able to buy after lockdown and we recommend you remain in contact with your bank/finance broker, to ensure you are ‘buy fit’ should the right property present.
For sellers, we think having a current signed section 32 statement and contract ready for re-opening on the 26th October is the most important thing to focus on, as without it the home cannot be sold.
There may still be some properties that sell during the extended lockdown. These include:
- properties viewed prior to the Stage 4 lockdown, currently being negotiated
- properties with no or limited value in the home (ie. land value/new home site/development site)
- properties purchased sight unseen
We do not encourage purchasing sight unseen. Purchasing a property is one of the biggest expenses you will make in your life. Stamp duty is 5.5% on top of it. That adds up to a lot of money if the home isn’t right.
The feel of a home is so important. Sometimes it can tick all the boxes on paper but, walking through, it just doesn’t feel right. How can you determine this from a video?
Will the video show you everything you should be looking at, or only what the operator wants you to see? What about neighbouring properties, slope, light, overlooking, building condition, ceiling heights, room sizes etc?
The video operator will likely be the vendor or resident, as agents, photographers, copywriters, etc are unable to attend any properties until 26th October (unless to facilitate actions related to moving into/out of properties and rentals).
For those wanting to auction, the first weekend (using the traditional 3 week/4 Saturday model) for restricted auctions is 21st November and advertising preparation can’t be done until access from 26th October.
We therefore think the ‘private sale’ market, more commonly now called ‘off market’, will dominate initially and possibly right through until Christmas, as well as some unlisted quiet ‘off market’, although vendors of these homes may not be as motivated to sell.
If you’d like to chat in more detail, don’t hesitate to contact us;
Adam – 0413 318 079
Kristen – 0408 625 965
Alexandra – 0419 727 578
Stage 4 Restrictions and Its Effect on Buyers
For most Victorians, the last week has been the strangest week of our lives as we familiarise ourselves with curfews, limited outings and the, hopefully only temporary, closure of work places, including the real estate industry.
Our thoughts are with all those who are finding themselves in a position of insecurity as a result of the closures and we hope for a speedy improvement to the current COVID-19 situation.
Closer to home, there are vendors who have recently sold and were planning on buying or renting something to move into when they settled, who now find themselves unable to inspect anything. Equally, some buyers have bought with the intention of selling their current home and find themselves in the stressful position of possibly holding two homes.
For those buyers, sellers and renters who have already entered into contracts, it may come as a relief that activities relating to moving can still take place; however, for those buyer/sellers who may be caught out as above, it is likely only to add to the stress.
New property campaigns expected to slow down
Although we saw a sprinkling of new properties hit the net last week, we don’t expect to see many new properties launch sales campaigns over the next few weeks, particularly whilst the uncertainty about when and how inspections will resume, remains. Many of these are advertising ‘contact agent to arrange an inspection’. Perhaps they were pre-programmed to hit the net before the shutdown, but with all inspections banned, we’re not sure how many buyers would want to buy a home sight unseen. From experience, many look better online and avoid showing any of the weaker features.
We anticipate the second half of this lockdown will become a little more active. While agents won’t be able to view properties before listing them for sale, many vendors may be comfortable to sign and prepare so they are ready to go as soon as they are allowed.
We anticipate an increase in the number of off market properties when the rules relax and the possibility of homes selling with only one or two buyers through, if the price is right for both parties.
Why the number of off-market properties is anticipated to increase?
- For those wanting to sell quickly, there will be time to prepare contracts and section 32 statements (many solicitors/conveyancers will still be able to work from home) before anyone comes through, so the home will be ready to sell straight away if a buyer is found.
- For those wanting a public campaign, unless the marketing steps (photography, copy, staging etc) were pre-prepared prior to the lockdown, this will still need to be done and takes time, usually about a week, and possibly longer if the number of sellers starts to increase.
Buyers can use this time to prepare
The biggest constraint for buyers when they find the right home is underestimating the time it takes for finance approval, particularly if you have a complex income/tax structure. Again, this is something that can be done from home and the banks and many mortgage brokers will be able to assist you remotely.
In addition to obtaining finance, it is worth considering the time between purchase and settlement as bank requirements are changing daily. If you’re considering a long settlement, finance approval granted now may not be approved come settlement time.
How it will affect the market
The market when it returns is perhaps a bit more uncertain. Six weeks is a long time. Will it hold the strength that was still around (for the good properties), as late as last week? We anticipate a slowing in the number of international and interstate buyers coming into the market as they will be unable to visit to view properties.
This reduction in buyer demand may create a more balanced market (ie. the gap between the number of buyers and sellers levelling out), with a more even number of homes for sale and buyers looking.
Some areas, however, may still see increases in demand. Speaking with agents over the last month, we note in particular the number of buyers who have purchased in the bayside suburbs of Brighton, Hampton and Sandringham, from areas such as Balwyn, Glen Iris, Carnegie, perhaps searching for a more relaxed lifestyle location.
In the meantime, we hope everyone makes it through the next six weeks safe and healthy.
As WoledgeHatt, we are ready to answer your questions and guide you through the problems and concerns you might have during this time. You can call us on 03 9509 7258 or contact us by filling out the contact form here.
Lockdown 2.0 and Its Effects on Property Market
We find ourselves a week back into isolation again. We hope you and your loved ones are staying safe and well during these difficult times.
Like Lockdown 1.0, the market is likely to see a slowing of new properties becoming available online, at least for a couple of weeks. We will probably also see the media’s sensationalising headlines again about how the property market is all doom and gloom and how much it is going to crash.
What we do know is that it didn’t after the first lockdown and it is quite possible that it may not this time either.
Perhaps in 6-12 months we may see a softening: when JobKeeper is no longer supporting wages, some businesses have unfortunately closed and banks have decided to call in some of their loans.
For the moment though, that’s all hypothetical – no one really knows what will happen.
What we do know is that people/families/large numbers are spending more time in their homes now –both living and working in them and they want the spaces to work efficiently. And, on average, most people live in seven houses during their lifetime.
Certain homes are in high demand and very low in supply: the family homes (all done) and single storey downsizers. If they come up for sale, they are rarely around for long.
For now, the lockdown time could be useful to work on a plan for the future. Consider what works both in your existing home and surrounding community and what doesn’t work and what you would like to change. If the location is already right, maybe you just need to change the property itself.
Being prepared is the most important thing. Have your finance sorted and a plan in place. If you already own a home, it’s either sell your property first with a good rental strategy in case the right home isn’t around before your settlement, or budget conservatively and buy first, having your home already prepared for sale to minimise any exposure to changes in the market place.
An Architect’s View
Some of the better properties currently for sale:
85 Victoria Road Hawthorn East – Mark Beardsley/George Bushby, Jellis Craig
3 John Street Malvern East – Hugh & James Tomlinson, Marshall White
- Large family Californian Bungalow on good land, Camberwell – circa $2.7m
- Renovated Hawthorne brick, 3-2-1, Hawthorn – circa $2.3m
- Land w. home seeking renovation or rebuild stca (no HO), Elwood – circa early $2m
- Renovated brick Edwardian terrace, 2-1-0, South Yarra – circa $1.5m
- Federation family home in prime street, Elsternwick – circa early $2m
- Large modern family home on large land, Black Rock – circa $3.2m
- Classy renovation, Victorian single fronter, 3-2.5,1, South Yarra – circa $2.2m
- Edwardian family home, close to amenities, north rear, Kew – circa $4m
- Renovated double fronted Victorian, north rear, Hawthorn East – circa $3m
- Renovated Victorian single fronter, 2-1-1, Windsor – circa $1.25m
- Modern family home with pool, Malvern East – circa $5m
- Californian Bungalow on good land, Camberwell – circa $3.3m
- Semi-attached Edwardian, close to amenities, Brighton – circa early $2m
- Renovated single level family home, close to schools, Brighton East – circa $2.25m
- Modern large family home over three levels, Glen Iris – circa $3.6m
- Near new Hamptons style single level family home, Highett – circa $1.95m
Is there a new post COVID-19 trend to move further from the CBD?
Certainly, if talk is anything to go by, there could be a short or even longer-term swing away from inner-city living.
With many employers and employees now comfortable with the ‘working from home’ option and real-life experience to show it can work (and sometimes even improve productivity), a number of buyers are giving this option serious consideration.
- Can often buy more for your money – bigger land, bigger or more comfortable home
- Quieter/semi-rural area – back to nature, back to outdoors
- Possibly more community minded
- Smaller, more personal shopping precincts
- Fewer cars, traffic and commuting issues
- Further from friends/family and the city
- Novelty could wear off
- Fewer choices for schooling (particularly secondary schools)
- Generally, less infrastructure (hospitals, emergency services etc)
- Fewer public transport options
Certainly, for younger buyers (singles, couples, families) disillusioned by the rise in inner city property prices, the appeal to move to holiday suburbs, such as Blairgowrie, Lorne, Barwon Heads, Flinders, Daylesford etc, could increase demand, resulting in price increases for some of these areas.
For those with some autonomy over their time and diary, a longer commute less frequently to the city (perhaps only two or three days a week) could be a more attractive option if the remainder of the week is commute-free.
A safer, quieter place to raise a family sounds all appealing, particularly for those with very young children yet to reach school age.
Generation after generation, parents have worked towards providing their children with more/better opportunities than they have had themselves in pursuit of a better, easier, more affluent lifestyle for their family.
COVID-19 could provide the introduction to the first generation to take what would have previously been considered a step backward in time, with more focus on less. Less time at work (recouping travel time), less organised after school activities for children and more time to enjoy a moment watching the sun set, a walk along a rural track, informal play experiences for children among nature, exploring the bush, more kids on bikes after school, hanging out in the streets and catching up with mates.
As children age, though, will the local school options still be preferred, particularly when it comes to secondary schools?
And for the CBD and Inner City Suburbs, what does this mean?
Looking at the CBD, if workers are only commuting half the time, will that mean that restaurants, cafes and retail stores will only have half the patrons to buy their products? How will this impact turnover and ability to pay premium CBD rents? Will people who currently live in the city want to remain there?Will city property values see larger drops than other parts of Melbourne? How will the flow-on effect impact outer suburb areas?
The inner Melbourne suburbs, particularly those surrounding the desired secondary schools, may be a little more protected. Residents here can have the best of both worlds – not too far to commute for work with good community infrastructure, good schools and easy access to freeways for getaways.
One of Victoria’s car registration plates reads ‘The Education State’ and, for many, it is one of the key reasons for buying near great schools. The ability to work from home while still living close to everything is a bonus. An opportunity to have a little more personal time at either end of the workday to spend with family and friends, to exercise or relax.
One thing we can be more certain of at the moment is that nothing is certain. Since the start of 2020, we have seen multiple changes up and down in the property market.
Does that mean you shouldn’t buy a property at the moment? We don’t think so. If your decision-making process is sound and long-term plans have been considered (next 5-10 years), if the right property is there, the time to buy is when you find the home. They don’t come up that often and when they do, they are rarely the same.
If you need expert advice or guidance during these time, WoledgeHatt Buyers Advocates are closely monitoring the trends and are ready to work with you. Contact us today to start a conversation!
- 52 Kooyongkoot Road Hawthorn (Michael Ebeling/Anthony Grimwade, RT Edgar), family home on 1,100sqm with pool and court, could be further improved with a cosmetic update – undisclosed circa $7,500,000
- 51 and 55 Broadway Camberwell, both sold for the same amount– similar land sizes, same orientation and period homes – undisclosed circa $2,500,000
- 21b Avoca Street South Yarra (Nicole Gleeson/Nicky Rowe, Kay & Burton), renovated townhouse, great location – undisclosed over $3,400,000
Some of the better properties currently on the market; an architect’s view:
29 Leura Grove Hawthorn East – Scott Patterson/Judy Balloch, Kay & Burton
50 Cochrane Street Brighton – Barb Gregory/Dot Murchie, Marshall White
53 Perth Street Prahran – Nick Gatacre/Joe Eason, Belle Property
- Modern large family home, 3 levels with pool, Glen Iris – circa $3.6m
- Striking modern home, pool, west rear, Malvern East – circa $5m
- Dated modern home, likely land, east rear ~810sqm, Kew – circa $2.7m
- Renovated & extended, Californian Bungalow, Hawthorn – circa mid $6m
- Family Federation home, good land, north rear, Malvern – circa high $2m
- Contemporary home on good land, east rear, Camberwell – circa $2.7m
- Californian Bungalow, over 1,000sqm, Canterbury – circa $3.3m
- River frontage family home on ~730sqm, South Yarra – circa mid $6m
- Edwardian family home on good land, Malvern East – circa $5m
- Californian Bungalow, convenient position, Hawthorn – circa $2.8m
- Californian Bungalow on good land, Camberwell – circa $3.3m
- Fully renovated, family, Victorian, east rear, Malvern – circa $6m
- Large Old English home, corner block, good land, Hampton – circa $3.7m
- Prime position period home, over 1,000sqm, two street fronts, Brighton – circa $7m
- Dated home, good land, close to amenities, Brighton – circa mid $5m
- New home site opportunity, ~15m frontage, Hampton – circa $2m
- Updated family Victorian on approx. 580sqm, Hawthorn East – circa $2.9m
- Fully renovated brick 3 bed single fronter, St Kilda East – circa $1.65m
- Renovated Victorian in landscaped gardens ~980sqm, Hawthorn – circa $5m
- Renovated brick single fronted Edwardian, Prahran – circa $1.45m
- 80s home with tennis court and pool ~1,800sqm, Hampton – circa mid $8m
- Dated brick family home, potential dual occ plans, Brighton – circa early $3m
- Contemporary renovated home, central Brighton location – circa mid $2m
Off Market Properties: What You Need to Know
Off market. Properties have always been sold in this manner by agents in Melbourne and recently this method of sale has become more prevalent.
But we believe that navigating the world of off markets is becoming even more complicated for buyers.
Historically, ‘off market’ properties have been sold very privately, often with only one or two parties (including the agent) aware that the property is even for sale.
COVID-19 has brought about a new way to sell ‘off markets’. It has become far more public and, for some, with less control over information being presented to buyers.
We mentioned recently a new trend where we are seeing a number of vendors interested in selling and testing the marketplace before investing in an expensive public campaign. Many of the early asking prices seem ambitious if we compare them with similar homes sold in the past year (remembering that during the past 12-month period we also reached another peak high among some weaker months).
A number of vendors are placing their biggest asset up for sale quietly with an agent, thinking only the qualified buyers will be made aware of the property, whereas in reality, the property is being shopped around to a number of local agents and their databases.
We are seeing more vendor advocates and sometimes agents inviting other local agents to introduce buyers to the property in return for a share in the commission. With limited stock around, this can be appealing for agents wanting to increase their commissions.
Unlike selling, it is much harder for a buyer to choose who they want to buy from. The buyer chooses based on the property for sale, rather than the agent selling the home. Most buyers are on all their local area agent databases. It can be confusing for buyers receiving multiple texts and emails about off market properties from a variety of agents.
Some of the questions we at WoledgeHatt arm our clients with include:
· Which agent should you contact?
· Which quote is correct?
· How will you know if there are other buyers interested?
· How should you make an offer?
· What price will the vendor really sell at?
· Is there a process for the sale?
· Is the property really for sale yet?
· How reliable is this agent in getting the deal done?
· Which agent should you contact?
· Which quote is correct?
· How will you know if there are other buyers interested?
· How should you make an offer?
· What price will the vendor really sell at?
· Is there a process for the sale?
· Is the property really for sale yet?
· How reliable is this agent in getting the deal done?
Most buyers love the thought of buying an off market property; however, it is important not to get caught up focusing on off market homes that may not really be for sale (yet) and miss out on something that could have been perfect, marketed the traditional way, or a property that has been on the market for some time yet the ‘asking’ price has been too high.
We believe that the more experienced agents with a direct line of communication to the vendor get the best result.
We are seeing a number of the better advertised homes sold within the first week of the campaign. Where in the past, a lack of contracts may have delayed quick sales, some agents and vendors are more prepared and aware that their best buyer may be one of the first few through the door and they don’t want to miss the opportunity to sell because they aren’t prepared.
As a buyer, being prepared is the best position to be in.
At WoledgeHatt we know the right questions to ask the agents and we know how to answer our questions above.
Since 2007, we have been buying homes via all these methods of sale and in all different types of markets. We specialise in residential homes, so contact us today and let us help you increase your chance for success when buying your next home.
One of the better properties on the market; an architect’s view
19 Margarita Street Hampton – Stefan Whiting/Guy St Leggier, Buxton
- Brick Edwardian, ready for a freshen up, Elsternwick – circa early $3m
- Landmark period home with modern rear, Elsternwick – circa high $4m
- Edwardian family home on good land, Glen Iris – circa $2.7m
- Contemporary home with downstairs master, Kew – circa $2.3m
- Victorian single fronter, Hawthorn – circa $1.75m
- Edwardian brick semi, close to amenities, Malvern – circa $2m
- Fully renovated double fronted Victorian, Malvern – circa $3.2m
- Single level home on approx. 470sqm, Malvern – circa high $4m
- Art deco semi attached, renovated, Elwood – circa $1.6m
- Extended timber period home, 2 bed, 2 bath, 2 OSP, South Yarra – circa high $1m
- Edwardian timber family home, close to beach, Hampton – circa $2.6m
- Period home to renovate or rebuild, 836sqm, near beach, Hampton – circa $2.8m
Changes in Real Estate Industry to Adapt
Victorians are looking forward to a new and improving normal this week. While it’s another temporary transition and there’s still a long way to go, the small steps forward are providing motivation and confidence that there is light at the end of the tunnel.
The last eight weeks have encouraged many businesses to review their procedures and plans for the future and challenged a number of ways in which business has been done. As a people-based business, the real estate industry has had to adapt quickly to ensure the health and safety of buyers, sellers, tenants and staff while striving to achieve the right outcomes for buyers, sellers, landlords and tenants.
Some of the bigger changes we have seen include:
- Plan A – most properties are starting out as ‘off market’. If the home doesn’t sell in the first two weeks, it is then converted to a public campaign (Plan B).
- More properties (with realistic sellers) are transacting quickly after being listed. Many vendors are more comfortable to take the early offer now than wait for a better offer later, as it may not be forthcoming.
- More offers are being made subject to finance, with anywhere from 14-28 days for approvals.
- Many vendors are becoming more focused on settlement terms over or equal to price.
- Fewer results are being reported and won’t be available until settlement, sometimes up to six months or more later, making it harder for agents to provide reliable Statements of Information.
- Private inspections only – providing more time to inspect in detail; however, also making it harder to determine other interest in the property, possibly resulting in buyers relying heavily on information from the agent (who is working for the vendor) to make their decisions.
- Online auctions – agent feedback, generally positive. Agents able to obtain far more information about interested parties as buyers need to register to bid (including 100 points ID). However, there is also greater potential for technological difficulties (ie some buyers can’t access apps if they don’t have the right equipment, or, in many cases, information may entered in incorrectly). Less emotion involved in the bidding process. More transparent for buyers than other methods of sale such as EOI campaigns but still can’t see who you’re bidding against. Will this remain a method of sale for family homes moving forward? If face-to-face auctions return as an option, perhaps not.
- Multiple buyers – the good properties are still receiving interest and offers from multiple buyers. Some are looking for bargains; however, a larger number remain focused on finding and buying a good quality home for the longer term at a fair price.
- More EOIs (expressions of interest) – with different and sometimes changing rules, this is still a method that many buyers remain uncomfortable with.
- Interactive inspections – perhaps a good starting point to confirm early interest; however, limited to viewing what the agent wants you to see and possibly avoids some of the areas you should be focusing on: hard to get true sense of space, light etc.
- Hand sanitisers and protective gloves – something that could continue post-COVID-19 for the health and safety of vendors/tenants, as many properties for sale can have a hundred or more people through their homes opening drawers and cupboards and touching furnishings.
For buyers who had been contemplating buying pre-COVID-19 and for those who have realised they need a move up/down/sideways as a result of COVID-19, now could be as good a time as any to buy. Interest rates are low and while stock levels on the internet are low, we are seeing a high number of good quality homes for sale off market.
Below are a few questions offering insight into what could now become important when looking for a home post-COVID-19 lockdown:
- More separated rooms – for use for work/school and quiet space for calls (Zoom etc) rather than the big open plan layout?
- Access to natural light within the home. Even more important?
- More focus on sustainability and energy efficiency with the home (to keep the bills down) eg. Self-sufficient power and water?
- Better kitchen layouts (don’t just look good but have to be functional) as cooking at home becomes more common?
- Garages to be used or double as gym areas rather just storing cars?
- Homes as the new office, functionality?
- Better options for bicycle storage – location, access, safe, dry?
- Focus on gardens within the property?
- External firepit / outdoor breakaway areas?
- Good access to a safe outdoor area close by – park, beach, safe walking track?
- Preference for houses over apartments?
One of the better properties currently listed; an architect’s view
7 Royal Crescent Armadale – Mark Harris/Fraser Cahill, Marshall White
- Renovated, single level, 3 bed, single fronter, Armadale – circa $2m
- 1930s brick family home backing onto park, Camberwell – circa $3m
- Brick single fronter, 2 bed, 1 bath, walk to beach, Middle Park – circa $2m
- Fully renovated, family brick Edwardian with pool, Glen Iris (St) – high $3m
- Renovated timber Edwardian, 3 bed, 2.5 baths, OSP, Gardenvale – circa $2.3m
- Modern 3 level townhouse with pool, Elwood – early $3m
- 2 bed, single fronter, close to amenities, Armadale – circa $1.45m
- Funky conversion over 3 levels, Richmond – high $2m
- Large, renovated, art deco family home, Toorak – circa $7m
- 2 storey timber Victorian, 3 bed, 2 bath, Malvern – circa $2.25m
- Family home, Edwardian, approx. 440sqm, Armadale – circa $3.3m
- Well positioned, family Edwardian looking for a freshen up, Elsternwick – high $2m
- Large contemporary family home (6 bed, 5.5 bath), Brighton East – circa $3.7m
How Covid-19 is Affecting the Property Market
With the Easter holidays now behind us and the first week of remote schooling under our belts, some of the earlier uncertainty has started to reduce. The media reports positive results about ‘flattening the curve’ of COVID-19 and we now have hope that some of the stage 3 restrictions may be lifted as early as mid-May.
Unfortunately, that is still unlikely to mean a return to normal as we knew it. COVID-19 has created unprecedented chaos to our lives and livelihoods. Many Australians have lost jobs and closed businesses. Some have been luckier than others, but most people are just hoping to ride the lock-down as best they can and come out, not too scathed, on the other side.
The property market has not been left untouched by the disruption, with decisions around inspections of homes changing frequently.
We can only imagine the stress vendors (particularly those who had already bought) were feeling, being told they couldn’t have any buyers through their homes. Equally, buyers who had already sold and needed to find a new home or house to rent, were concerned they might find themselves with nowhere to live, or resort to buying/renting, sight unseen.
The Melbourne property market could see a new normal emerge from this crisis.
Private sales are now commonplace. While some agents (particularly newer or younger ones to the market) have not had much experience transacting this way, there are also a number of more experienced agents who are very skilled with this method of sale. Around 30% of the homes we buy are off market/private sale, so we are comfortable and experienced operating in this new space.
How was the Property Market Before Easter
Agents were contacting us daily (sometimes multiple times a day) with new property listings. There were a few good opportunities among the pickings and some of our clients, circumstances allowing, were lucky enough to be able to purchase good homes. We noticed that buyers who had been looking for quite a while were able to benefit from the increase in stock and decrease in competition. That being said, many sales were still competitive.
How is the Property Market After Easter
New property numbers have slowed. With uncertainty in our greater economic direction, many discretionary buyers/sellers may choose to wait until a clearer path is formed.
There will, however, still be a number of buyers and sellers needing and/or wanting to buy/sell for personal ‘stage of life’ transactions. For both parties these include, but are not limited to, upsizing, downsizing, death, divorce and financial reasons. Being ‘locked down’ at home has provided opportunity for some to appreciate their houses and locations, and, for others, has helped them realise that a change may be due sooner rather than later.
When and How to Buy
Everyone seems to have an opinion about when is the best time to buy.
- Is it when the market is on the rise?
- Is it at the bottom of a crash?
- Is it when there is plenty of stock?
- Is it when there are plenty of buyers?
- Is it when the interest rates are low?
- Is it when no one else wants to buy?
- Is it when everyone is comfortable to buy?
No-one can predict when the best time to buy may be. Our focus has always been helping buyers to maximise their chance of buying the right home at the right time in their life cycle (both financially and emotionally) when the right one comes along, irrespective of market fluctuations. If it doesn’t tick key buying criteria, regardless of what’s happening in the market-place, one shouldn’t buy.
For those wanting to buy now, what is the best way to go about it?
Some properties are still being advertised online; however, a greater portion of what is available for sale at the moment is not.
One agent, who has been in the industry for a number of decades, said they are enjoying the return to private sales, as they (the agent) get the opportunity for lengthy one-on-one discussions with the buyer, enabling them to extract enormous amounts of personal information to help maximise the price/outcome for the vendor.
There is the new option of virtual tours online and interactive floorplans, but there really is nothing like inspecting something ‘in person’ – to get a proper feel for how spaces work, how natural light is captured and if privacy from other properties is or is not addressed.
We think inspections can’t and shouldn’t be avoided.
Some questions buyers considering purchasing at the moment may like to contemplate include:
- How can you find out about these homes?
- Who should you talk to?
- What is agent ownership and how could it affect you?
- What information do you have to give the agent to inspect a property?
- Will this limit your ability to inspect homes?
- Are you the only interested party?
- How much is the property?
- Is there a process?
- Is the price fair?
- Is it really for sale?
Buying in an uncertain market has the potential to be risky. Prices could fluctuate unexpectedly up or down and potentially for a number of years. But, over the years, one thing stands strong with all our clients: they want the right information, so they can make a good decision to buy a quality property that has the flexibility to work for them for an extended period of time.
A sample of current “Off market” Properties
- Freestanding Edwardian with plans for extension to create 3 bed, 1.5bath, Malvern – circa $1.35m
- Large Federation family home, large land, Malvern East – circa mid $6m
- Contemporary family home with pool, Armadale – circa early $5m
- Modern townhouse, 2 bed, 2.5 bath, DLUG, Prahran – circa $1.7m
- Brick Edwardian semi, north side, Prahran – circa mid $1m
- Californian Bungalow, near amenities, north rear, Hampton – circa $2.3m
- Landmark Victorian home on large land, Camberwell – circa $8m
- Large family home on large land, north rear, Camberwell – circa mid $4m
- Contemporary family home, renovated, Ashburton – circa high $1m
- Californian Bungalow with opportunity to improve, Hawthorn – circa $2.8m
To our valued clients and the larger community,
Out of respect for those who have lost jobs or may be entering difficult financial times, we won’t be providing market updates or posting on social media sites.
While we can, we are still assisting those clients who are needing to buy homes at this time.
We understand there are vendors who need to sell and buyers who need to buy and we will do everything we can at this time to help facilitate those transactions with empathy and understanding.
In the meantime, we send wishes for you all to stay well and healthy as we work through these difficult times.
Kristen, Adam, Alex and the team at WoledgeHatt
Saturday was the first auction weekend for 2020 with genuine volume. It was a mixed day, with a number of homes selling well above the quoted ranges and reserves, others passing in around or just above the range and selling after, and some with limited or no interest. However, with an overall reported clearance rate of around 80%, one couldn’t say the market was not in the sellers’ favour.
The media is now back on the ‘boom’ bandwagon.
Stock is still low and buyer numbers are continuing to grow. A number of agents have commented that there are many brand-new faces they haven’t seen before. Adding to local upgraders, they are seeing newcomers wanting to improve their location/lifestyle (suburb jumpers) and/or relocating back from overseas after working abroad.
Fear is the new market driver: fear of missing out and fear that the prices will jump another 10% this year (if you listen to the media) and maybe make your chosen suburb no longer affordable.
A number of vendors, however, are still well above the market. Looking at the weekend results this morning by price (in our key focus area), eight of the first 20 homes were passed in over $2.5 million.
Expression of interest, private sale and off-market sales seem to be popular ways for agents to sell at the moment. Fear of missing out is helping this popularity and the process provides an opportunity to sell with less transparency than a public auction.
So far this year, we have seen some homes sell for record prices, well above what may have been achieved 12 months ago and possibly above the height of 2017 prices.
Enticing quotes, however, can do the same thing as they increase the ‘real’ amount of interest by encouraging those who ‘hope’ they can afford the property to attend the inspections, providing social proof that it’s a great home.
The combination of media and quotes installs confidence for buyers that competition is going to be fierce and good selling agents are using the fear of missing out as a strategy to get buyers to pay top dollar because ‘someone else will offer it if they don’t’.
This is true in many instances. There are properties where record prices need to be paid to be the successful buyer. A more prudent question may be ‘which ones are those and why?’
Many homes are staged now and look good, but how do they really work? Understanding what you/your family needs and what the property offers is key. For example, a home has five bedrooms but the only meals area big enough for a table of six doesn’t work. Where do you plan to sit and eat when visitors come over? Or maybe you just stop having people over …
There are many components that contribute to a property being a ‘good’ property, including position, orientation, zoning, positioning on the block, layout, façade, size, improvement options, car options, to name a few. Research is the key.
Research isn’t just about the property. It can include vendor motivations, buyer interest, other properties on the market, development in the area and relevant comparable sales (often different to the agent SOI) and all of this leads back to price.
It is possible that more buyers plan to buy for longer periods before they sell again now, but the number of homes that re-present for sale after only 2-3 years is high. Life can change quickly, whether it be a work relocation, finance change, marital status change etc. and knowing what you’re buying, why you’re buying it and how much you’re paying may be helpful to avoid stressful situations down the track.
Homes that have struggled in the past don’t suddenly become good homes just because the market has improved. Sometimes good homes struggle because the vendor expectations or motivations aren’t aligned with the market at the time. Some have been improved and past issues resolved. Some have the same issues and a better market won’t change them.
In a market with limited stock and plenty of hype, it can sometimes be harder to make a good decision as it’s easy to get caught up in the emotion of it all. Agents are counting on it and using it to get record prices.
- 108 Sackville Street Kew (James & Charlie Tostevin, Marshall White) – renovated ’70s split level home on south rear 921sqm (approx.), initially quoted $4.1-4.5m, sold for an undisclosed amount over $5m
- 9 Spring Street Sandringham (Nick Jones/Amanda Thomson, Hodges) – a modern home on 846sqm (approx.) in a weaker part of Sandringham, quoted $2.2-2.3m, sold for $2.68m
Properties we like going to auction this weekend:
9 Talbot Avenue St Kilda East – Limor Herskovitz/Nikki Hanover, Garry Peer
8 Lawes Street Hawthorn – Sam Wilkinson/Garrick Lim, Kay & Burton
“Off Market” Properties:
- Two storey family home with pool, Glen Iris – circa high $2m
- Period home, Central Park district, Malvern East – circa $4.5m
- Single level Edwardian with north rear, Malvern East – circa $3m
- Large family home on approx. 827sqm, Canterbury – circa $3.7m
- Edwardian style, newer build, family home, Sandringham – circa mid $3m
- Family home on large land approx. 1,020sqm, north rear, Glen Iris – circa $4m
- Victorian home, approx. 702qm, west rear, Hawthorn – circa high $4m
- Timber Edwardian on approx. 430sqm, Hawthorn – circa high $2m
- Family home/land, walk to beach, approx. 651sqm, Brighton – circa early $3m
- Family home on good land size, Malvern – early $4m’s
19 Myrtle Road Hampton
The home at 19 Myrtle Road Hampton delivers a great lifestyle location for families with a north rear. The home itself is a little quirky in its layout, with the original timber home extended out and down at the rear for added living, plus a master suite upstairs. Perhaps these aspects, plus a quote range of $1.85-1.95m had people spooked when it originally went to market April/May 2019. At that time, the auction resulted in a pass in, with nothing but a vendor bid placed. Less than a year later with a quoted price of $1.7-1.8m, there was a much stronger level of interest in the property. A young family opened the bidding at $1.7m, followed by a second party and the two traded offers to swiftly take the property on the market at $1.85m. Increments slowed to $5k, but came so fast that a third bidder entering at $1.93m was soon left behind again. Both bidders were now clearly trying to slow things down, dropping to $1k offers, but not prepared to give up the home for their families. The second bidder eventually outlasted the competition with a solid price for the offering of $2.00m.
108 Sackville Street Kew
Interesting property this one with plenty of questions marks…..south rear, no car garaging, end of T-intersection…But it is a ’70s modern home of some regard – The Buckle House, by Architect Kenneth Edelstein, which has been tastefully updated inside and has a great feel.
Word in the industry was this was going to be well supported by the market on auction day, and the rise of the quote during the campaign supported that. In front of about 100 people, auctioneer James Tostevin looked for an opening bid of $4.2m but was ‘upped’ by the first bidder who confidently bid $4.3m. Then the auction was off and running with another bidder joining in and the property was announced on the market at $4.6m. A third bidder joined in around the $5m mark but didn’t have enough steam to continue much of a fight, and the property sold under the hammer for a very healthy $5.06m, to the starting bidder. Vendor would have to be very happy here who last bought the property back in 2013 for just over $3.3m.