Each Week I provide an up to date report to my vendor’s with insights into not only their buyer’s feedback and price interest but also the wider market in general. As always, the following in no way constitutes financial advice and no warranty is offered as to its accuracy or validity. The reader is to make their own inquiries prior to making any decisions.
The Local Market:
Within Wyndham, activity was still good with several offers presented to Vendors, generally within or just under the range on mid-range property values. During February our sales listings attracted over 40,000 direct views online a noticeable increase in the January activity.
Total Market sales for the week in Wyndham was patchy across the industry it seems through, with Domain reporting only 7 sales in Wyndham, although a couple of properties which had been on the market for some time moved.
Market Wrap for the weekend of the 10th March:
As expected, the weekend was very quiet for Buyer activity with only 143 Auctions being reported compared with 365 last year. Clearance rates were stable at 55% though, although down from 65% for the previous year.
During the month of February more than 1,873 auctions were reported to the REIV. Approximately 799 sales were recorded. 800 properties were passed in, 400 of those were on a vendor bid. The clearance rate averaged 56.5%, up on December’s 49%. Although down on 2018’s 71.5%.
The Wider Market:
This week and the next will be a big week for new listings for the overall Market – Auction campaigns run generally for 3 to 4 weeks with some agents running a 5 week campaign. There are 5 clear weekends from this week to Easter (Good Friday 19th April) and then ANZAC day the weekend after. So the weekend of the 6th and 13th will be considered “Super Saturdays” for the close of the Autumn Market.
Philip Lowe, Governor of the RBA presented an in-depth report into the Property Market last week to the AFR Business Summit. While keeping in mind that Real Estate is HYPER local, to the point that the orientation of a toilet can influence an individual buyers decision. (I have literally had a person not buy a home which they said was otherwise perfect for them, because they could not cost effectively change the orientation of the toilet which had to face a certain direction due to cultural beliefs) – Welcome to Real Estate
Anyway, the report is very succinct in relation to the overall trends and rear view outcomes of Property: In his opening statements he states that across the board “prices have fallen 9%”. However in the inner city pockets, some prices have come back harder. Realestate.com.au is reporting St Kilda for example has come back 29%, Toorak is down 31% and Clayton is down 23%, so others have gone forward to balance those numbers out. Locally prices have seen stability with property values not moving for the past quarter of any statistical value.
“Declines of this magnitude are unusual, but they are not unprecedented. In 2008 and 2010, prices fell by a similar amount, as they did on two occasions in the 1980s. In the 1980s, the rate of CPI inflation was higher than it is now, so in inflation-adjusted terms, the declines then were larger than the current one.”
Wyndham does have two strong factors in it’s favour though. Population and demographics. Population is the key to finding support in its prices. While investors are light on the ground still. Home owners, specifically young home owners, which lenders love are still around and Wyndham is importing them from all over Victoria, Australia and the world at over 14,000 per year. Population in relation to supply and demand is referred to 11 times in his speech.
We are also starting to see wider competition from lenders in the property market also. I met with a local Werribee Broker for a coffee last week to discuss the feel of the market since the Haynes Royal Commission and they confirmed that their deals with “the big 4” banks is almost non-existent. The NAB is about to launch a campaign to claw back some of this loss with a direct marketing campaign called “the bank behind the broker”.
Second tier lenders are continuing to fight for business with commercial and residential lenders moving back into the 100% finance business on Real Estate for low to medium risk borrowers: Granite Home Loans is offering a 100% loans to university educated professionals employed in the same industry for three years, up to $1m. Other lenders to cut rates for new borrowers include Citi, AMP Bank and Teachers Mutual Bank.
Some economists are saying their could be a rate cut as early as July. Most agree that we are unlikely to see rates increase. The cash rate has been on hold since 2016 and expected to stay there for the short term though. CPI/GDP are factors the RBA is watching (consumption) and depending on what happens in the April Federal Budget, which might involve a pre-election budget stimulus of tax cuts and cash injections, rates could come down quicker than expected.
As I mentioned, there are 5 weeks before we move into the Winter sales market (not a negative in its own right). While the market is still active, on the back of softer activity, it will be very dependant on buyer sentiment, government policy and lender’s intent to grow their mortgage books.
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Licensed Estate Agent
0419 536 905