Whilst turnover is up and clearance rates are pushing through the mid 70’s% we know that overall stock levels are lower than they have been since around 2009 when we saw the statistics from REIV showing 1000+ auction and private sales per week in July and August.
In the last 3 weeks, we have had an interest rate drop and an accepted position by most economists that the bias is still for further downward movement. We have had an election called and whilst the initial election had been slated for September, I do not think anyone had any doubt what the outcome would have been had Ms Gillard still been Prime Minister. That is no longer the case, although many commentators are still saying Mr Rudd will have a hard time of it, everyone agrees the election will definitely be closer than it would have been under Ms Gillard.
So why am I becoming a political commentator?
We need owners to put their properties on the market. The reason the prices in Melbourne are rising and why there are some unbelievable results is a tremendous imbalance between supply and demand. Add to this the interest rate drop which has made it possible for prospective purchasers to borrow more from the bank at the same cost of repayments, and you have a situation where buyers may go a little too far on their offers/bidding and this pushes up prices of homes that would not normally have sold so well.
Should buyers wait?
The answer to this is yes and no. Buyers need to be vigilant. You need to watch the market all the time. We have bought several very good homes at very reasonable prices in the last couple of weeks, but at the same time we have been “blown out of the water” at a couple of auctions because there are some exasperated purchasers out in the market place.
Good buying is when you find the property you want, work out what it is worth and try to purchase it at that level. If the property pushes well past a fair price, then move on and go for the next one. If it is being sold for a fair price, you want to make sure you are ready to purchase it.
The one thing that is almost a foregone conclusion is that property prices in Melbourne will rise over the next 2 – 3 years and we are at the beginning of a new upturn in the market. I would equate this time as equivalent to 2005 – 2006. If you are considering a purchase in the Melbourne property market, please feel free to give our office a call.
JPP Buyer Advocates