The REIV website tells us there were 960 sales in the week ending 31/1/2010. Of these 84 were sold at auction. This represents over $450 million worth of property.
Our 9 advocates were out and about on Saturday looking at over 30 open houses. In the range of $400k – $600k there would have been about 50+ people at each open. One agent we spoke to this morning said he had 90+ groups on Saturday and another 40+ groups on Sunday for a 2 bedroom unit in St Kilda East.
Enquiry levels on our website and phones have reached new records! Investors and owner occupiers alike!
It is fairly obvious that most potential property purchasers are heeding the media warning. “IF YOU DO NOT BUY SOON YOU WILL BE OUTPRICED BY THE MARKET.” We are not in a price bubble. Property prices are not about to spike and then do a “share market” 48% drop (All Ordinaries index dropped from 6492.4 to 3338.4 December 07 to March 09)
The Melbourne median house price is currently at $540,000. The media is generally saying that it will only be ten years before the median house price in Melbourne reaches $1 million. In my opinion we will be there by 2016 – 2017. (This would be an average of around 10% each year). Median units will probably be there by around 2020. At that price point if the banks keep their current lending criteria, the average person will need $255,000 as a deposit to be able to pay stamp duty and avoid lenders mortgage insurance.
Even with interest rate rises on the cards this year, starting with a probable rise tomorrow, don’t think that will affect the established property market. There are simply not enough dwellings to house our growing population.
We will have a better feel of price movement by the end of February, once we have seen three or four substantial weekends. But anecdotally, most agents are saying, whilst they have listings in the pipeline, there are not a huge amount ready to begin auction campaigns. If this is true, we will see property supply dwindle more than last year, whilst demand seems to have stepped up another notch.
If you are looking to secure property this year, I would strongly suggest at least talking to a Buyer Advocate. They are professional real estate agents who will assist you with property selection, assessment and negotiation. Be sure when talking to a Buyer Advocate to ask if they only BUY property.. & Not sell as well (Vendor Advocacy).
If you would like to make an obligation free appointment with us please give our office a call on 9523 1054
Ian James