February is already upon us and we have just completed our busiest month for new enquiries since I have been a buyer advocate. First home buyers, first time investors, people who are upsizing their properties are all out and about looking for bargains. During this same time all my conversations with Real Estate Agents have been centred on the lack of new listings. If Demand is rapidly increasing and supply is decreasing there is only one place for the prices of property to go. UP!!
This will only affect the lower end of the market, under about $750,000. Above this there will be less new purchasers and potentially a lot more vendors as loans and margin calls come due.
Interest rates are sure to drop after the Reserve bank meeting tomorrow. It is just a matter of how much? The current thoughts are 0.75% – 1.5% (I think it will be 1% or 1.25%).With money getting cheaper, first home owner grants still in force and rental returns getting higher, more and more people will want to get into the market this year.
Looking at the statistical data, the Melbourne Median house price dropped on 0.9% in the December quarter. Whilst we have seen drops in some of the more affluent suburbs like Hawthorn East drop over 20% in the same time. Balwyn and Kew also showed drops of well over 10%. Bucking the trend were suburbs with lower median prices. Although not all affluent suburbs did badly. The top performing suburb last quarter was Templestowe with a rise in median price of 49.1% on over 30 sales, Toorak went up by 15.4% whilst Brighton dropped 4.7%.
These are statistics and they can be read in a variety of ways. Excellent property with long term outlook for fantastic growth needs data to be looked at over a much longer time frame than a quarter or even a year. Look at howa property area has performed over ten years and over twenty five years or more. This will tell you much more than short term data.
If you are considering entering into the property market this year, please do not hesitate in calling us for a no obligation appointment. We can explain in far more detail what good property purchasing is all about.
Ian James