As 2019 comes to an end, we farewell a year that’s certainly been unique from a real estate perspective. From clearance rates in the 50s and lower early in the year, the Melbourne market’s recovery has surprised even experienced analysts with its strength and consistency.
CoreLogic’s November Home Value Index showed that across the country, house values climbed 1.7% during the month – the largest monthly national gain since 2003. Melbourne values continued their rapid recovery, with a 2.2% increase in November taking overall growth during the past three months to 6.4% and making us the best-performing capital city. At a local level, our prestigious inner east region has experienced even faster rates of growth, with values up 8.3% over this period.
The Melbourne market’s growth is now at its strongest since 2009 – a truly remarkable turnaround. CoreLogic’s head of research, Tim Lawless, expects that we may see a return to peak conditions as early as January 2020, leading the rest of Australia.
2019 has given us a 75-basis-point reduction in interest rates (which are now at their lowest level since the 1950s), less stringent loan serviceability requirements from APRA, and certainty regarding proposed tax reforms following the federal election. In the second half of the year, buyer confidence has been high, and lower-than-usual stock levels have kept the clearance rate above 70%.
Our Albert Park office has enjoyed great success with many listings – from both sales and rentals – in St Vincent Place, one of Melbourne’s most tightly-held property pockets.
Things are slowing down as we approach Christmas. However, the real estate industry doesn’t take an extended break like it once did, with plenty of activity across sales and property management now common from early January.
On the sales side, listings are predicted to increase in the new year. If you’re considering selling, there’s still an opportunity to take advantage of low stock levels driving increased competition. Speak to an agent before the new year about what needs to happen prior to listing – if you’re not away, the holiday period could be a great time to attend to repairs, maintenance, and getting your property in ‘sale ready’ condition.
From a property management perspective, if you plan to review your investment portfolio in 2020, remember that it’s straightforward to change property managers. If your current PM is just going through the motions, we’d love to speak with you about how we can maximise the value of your rental.
2020 is shaping up to be another interesting one for our property market. Many economists are tipping that values may be close to their 2017 peaks in the first part of the year. With interest rates predicted to stay low for the foreseeable future, conditions are certainly ripe for the growth in values to continue.
Wishing you a safe and happy festive season.