Market again on hold but strong results prevail for good properties
The rollercoaster continues for the Melbourne property market.
Buyer demand remains strong and outweighs market supply.
Interest rates remain low, job security for the majority remains positive. Household saving amounts continue to build for some.
Clearance rates have been reported as high over recent weeks, with some big results selling well above the top of quoted range:
- 14 Kanowna Street Hampton – modern two-storey home – $4.775m
- 38 Manning Road Malvern East – $4.716m – two-storey home, undisclosed in the mid-to-high $4ms
- 5 Kooyongkoot Road Hawthorn – basic home on 541sqm, undisclosed, in the high $3ms
- 93 Sandringham Road Sandringham – renovated single-storey weatherboard, 563sqm – $2.93m
- 25 Hume Street Armadale – Neil Clerehen designed home, undisclosed in the low $4ms
- 28 Stanley Street Canterbury – land 753sqm, west rear, undisclosed in the low $4ms
- 9 Dixon Street Malvern – modern two-storey home, a little dated, mid $4.5ms
- 21 Alexandra Street South Yarra – undisclosed, almost $3m
As independent buyer advocates, we are constantly asked what is happening and what is about to happen.
Due to Government Lockdown Restrictions in Victoria, the only attendance currently allowed at properties are those (such as a final inspections) legally required to facilitate a move in or out of a sold or tenanted property.
This is in variance with other states, notably NSW where one-on-one inspections can take place. Many agents and industry bodies in Victoria are calling for this. We will have to wait and see what transpires on that front.
In the meantime, any potential properties coming up for sale can only be appraised and inspected virtually, assuming there is a vendor or tenant living in the property to facilitate a home walkthrough via Facetime, Zoom or a similar platform.
Other preparation required for a sale such as photography, copy and staging (unless in place prior to 5th August), is also on hold and cannot be undertaken during the lockdown.
Whilst this is no doubt terribly frustrating for some buyers and sellers (particularly those with a more pressing need to buy/sell), unlike other industries where transactions and sales may be lost, the property market goes into a form of ‘hibernation’ and when it re-opens picks up where it left off.
Vendors and buyers should be confident that this is the case, as we find it difficult to believe there are many buyers out there willing to transact hundreds of thousands of dollars or millions of dollars, to buy something sight unseen when there are so many things that can go wrong.
Many properties that were listed pre the recent lockdown and had a handful of inspections, have had an opportunity to sell either privately or via auction virtually (ie through Zoom or similar online portals) on or before the scheduled auction dates, if the agent and/or vendor felt there were good enough interest levels.
Those that have not yet sold are possibly because they have not had enough market exposure (ie limited inspections/limited interest) or unrealistic vendor expectation.
We are expecting more properties to come to market as Melbourne reopens, although it could take a week or so for advertising to take effect, given the lag time between opening and getting homes photographed and staged.
A number of properties may sell quickly and quietly during this time. Being ready and ‘buy fit’ will ensure you don’t miss an opportunity if the ideal property is available.
As to the future? It’s hard to predict, of course, however, we are hearing talk of:
- shorter auction campaigns (possibly only a week or two, rather than three) and an increase in the number of open times within the shorter time frame. At this stage, it appears auctions will still the preferred choice of sale. The benefit for buyers is this process offers greater transparency and, for vendors, the buyer cannot cool off.
- more off-market opportunities.
- more private sales rather than auctions.
If we don’t open up for some time, will we see more virtual inspections offered and purchased without a physical inspection? We think this will be less likely to gain traction.
As one of the biggest purchases people make in their lives, this could be an extremely risky and expensive decision if you get it wrong. Consider:
- How can the true sense of light and space be experienced?
- Will overlooking windows from adjoining properties be shown?
- What about senses of smell – how could you tell if dampness/mould was an issue?
- Then of course there is also the gut feel or ‘feel’ factor, which most would acknowledge is critical in the purchasing process.
If you would like help to be in a winning position when Victoria reopens, let us show you our tried and tested purchase framework which makes sure you stay ahead of the market so you can buy your ideal property.