Domain’s just-released House Price Report shows that Melbourne’s house prices rose more than 4% during the September quarter. This bounce means that more than half of the value lost during the recent downturn has been regained since March. It also represents the quickest property market turnaround we’ve ever seen.
Melbourne’s market recovery began in a more subdued way during the June quarter and has accelerated since then. A trifecta of significant events – the Coalition’s election win, falling interest rates and improved access to credit – have been major drivers.
The Reserve Bank has cut the cash rates three times in the second half of 2019. While these cuts generally haven’t been passed on in full by the banks, most homeowners are enjoying access to more affordable credit, better borrowing power and stronger mortgage serviceability. It’s pleasing to see the Melbourne property market outperforming Sydney; both capitals are experiencing strong population and job growth and low unemployment, but we’re seeing a more rapid market rebound locally.
The number of new listings remains down compared to historical trends; however, our clearance rate is consistently above 70% and hit 77% on Saturday – our biggest auction day of the year to date. Buyers are returning to the market fairly aggressively, realising that the low point looks to be well behind us.
The Melbourne market has rebounded much faster than expected, and economists are now predicting that house prices will continue to rise for the rest of 2019 and into 2020. ANZ and NAB are among the banks who have revised their earlier predictions – ANZ expects Melbourne house prices to rise by a total of more than 10% between July 2019 and June 2020, while NAB forecasts a 7.4% jump. Moody’s Analytics is even more bullish, suggesting that they expect our property prices to be back at their peak by September 2020 and our median to grow by close to 15% by the end of 2021.
Across our network, we’re certainly noticing a sharp uptick in the number of investors looking to take advantage of favourable macroeconomic conditions and make a purchase before end of year. In fact, all types of buyers who are keen to buy in 2019 are starting to feel the pressure – with the Spring Racing Carnival producing a couple of quiet auction weekends in early November, there are perhaps only four or five solid weeks of sales before things slow right down over Christmas and the January school holidays.
Whether you’re considering buying or selling, there’s certainly scope to achieve a great result at present. Vendors will benefit from buyers coming back into the market strongly and competing over a lower-than-usual number of listings, while buyers who make moves before Christmas will benefit from an early-mover advantage.
2020 is certainly shaping up to be a different year for Melbourne property than many had predicted, with our market’s recent performance bucking all expectations. Whatever your property plans, get in touch with your local Greg Hocking office to chat about how we can make your property aspirations a reality.