Some good news this week with the unemployment rate unexpectedly falling to 6.8 per cent in Australia from 7.5 per cent the previous month. The number of people in employment increased 111,000 as restrictions were unwinding across the country. In Victoria, unemployment rose to 7.1% from 6.8% which is below the highest point in June at 7.5%.
With COVID-19 cases declining rapidly in Melbourne, it may be possible that the hard lockdown may be eased earlier than the October 26 expected date. Feedback from many selling agents that many vendors are still being non-committal about selling, however, I suspect as the case numbers keep declining in Melbourne, that vendors will start to gain some confidence to list their property for sale. There is no doubt buyers keen to buy and opportunistic investors are circling. I am predicting it will be a very active Spring/Summer season.
I have requested Chris Devlin from Quora Financial provide some interesting statistics in relation to mortgages.
Have a great week.
Kim Easterbrook
Australian lenders are open for business and doing as much as they can to attract new business through low interest rates and onboarding incentives.
Despite the obvious headwind, the Victorian market remains remarkably buoyant with Leading Aggregator, Connective, reporting $3.3 billion in Purchase Approvals and $3.7 billion refinance approvals so far in 2020 from their 20% market share. Further, in the 6 months ending August 2020, Victoria accounted for almost half of Westpac’s 3000 national credit approvals. Almost 70% of all borrowers nationally are taking advantage of the record low fixed rates on offer.
Unfortunately, industries such as hospitality, travel and tourism understandably find it difficult to convince lenders that credit is a good idea right now. Lenders are also assessing credit applications more closely than they were pre-COVID 19. For example, before COVID-19, lenders would generally assume novated lease payments paid through salary deductions were paid on time and correctly. Now, they will ask for a statement. They won’t make assumptions. Application turnaround times are taking a few days longer as a result.
So, is the extra information and time taken to obtain credit worth the effort? The low cost of finance makes it an attractive time to buy. For those looking to review their finance, the difference between the interest rates offered today and even recent legacy interest rates are significant. Customers are saving thousands per year, so I’d say that is a resounding yes!
Chris Devlin – Quora Financial www.quorafinancial.com.au
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With the daily cases of COVID-19 rapidly declining and with the first easing of restrictions today in metropolitan Melbourne, we are starting to sense a little more optimism as there is now light at the end of the lockdown tunnel.
That being said, based on Daniel Andrews comments yesterday, it does not seem that private inspections will be allowed in Melbourne any earlier than Step 3 on the Roadmap which is estimated to be the 26th of October. We do remain hopeful that the declining case numbers mean that this could come sooner. Fingers crossed.
For metropolitan Melbourne, this means that the normally active Spring season will only have a six to seven week window before the Christmas shut down period. This year has been far from a normal year and it seems that selling agents are already preparing to work through December/January and all the way to the end of March (Easter). There will be a lot of catch up to do over this period as buyers and sellers currently remain in a holding pattern.
Regional Victoria is still transacting as private inspections continue but open for inspections and public auctions with a COVIDSafe plan may recommence within weeks.
The rental market has remained active during lockdown with properties leasing out via virtual videos. This segment of the market has adapted really well and whilst not many buyers will purchase a property based on a video tour, many tenants have been happy to sign a lease.
Enjoy the sunshine this week!
Kim Easterbrook
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Melbourne’s Real Estate Industry was hit with some disappointing news yesterday as the Premier released Victoria’s Roadmap to Recovery.
As it stands, there will be no private inspections allowed in metropolitan Melbourne until the 26th of October in devastating news for buyers and sellers. There had been a glimmer of hope that we were going to reopen at the end of September, but this did not eventuate.
The news is better in regional Victoria where case numbers are very low and the roadmap to recovery should be quicker. However, Geelong has been put on notice due to higher case numbers and, is on close watch.
So for metropolitan Melbourne, we are still in a holding pattern for another six weeks. This means the properties that selling agents have listed for auction next month will need to be postponed. There is also an issue for some vendors who have sold their home and now cannot buy. These vendors could be pushed into the rental market.
For regional Victoria, private inspections and online auctions will continue and possibly public auctions may be allowed by end of November with gathering limits applying.
There will no doubt be an economic fallout for the slow road to recovery, and it is very frustrating for everyone living in Victoria. Let’s hope everyone does the right thing and we can achieve our targets so we can start to live life with some kind of normality again.
Hope you enjoy the sunshine today.
Kim Easterbrook
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Melbourne’s property market remains quiet but some properties that were listed pre-lockdown have sold and the odd property selling where the buyer has purchased sight unseen. New property listings are down 50% which is not surprising. Property prices have remained stable and the property market balanced due to many buyers and sellers holding off transacting until the property market reopens again, hopefully in two weeks’ time.
One auction that did occur on the weekend was the online auction of 1 Douglas Avenue, Box Hill South. The auction attracted four bidders with the property selling for $82,000 above its reserve for $1,052,000.
Regional Victoria has remained active (albeit listings on the lower side than normal) with Stage 3 restrictions allowing private inspections. According to some selling agents, there has been an increase in enquiry from Melbournian’s wanting to move to the country and also an increase in first home buyers, particularly in Geelong, wanting to purchase a home with the option to commute to Melbourne for work.
In Geelong, two ‘renovator delights’ sold well above reserve at auction over the weekend. One being in Belmont and the other in Geelong West. Geelong West has been highly sought after for many years and Belmont an up and coming area and popular due to its affordability and access to good schools.
79 Isabella St, Geelong West sold for $602,500 in a marathon 45 minute auction which sold $130,000 over reserve. The house was not even liveable whilst 62 Oberon Drive, Belmont (another renovator’s delight) sold for $40,000 over reserve.
Have a great week.
Kim Easterbrook
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We are halfway through Stage 4 restrictions and with the amount of daily Covid-19 cases declining, we appear to be on track for some restrictions easing in a few weeks’ time.
The property market has been very quiet over the past few weeks with the inability to hold property inspections effectively shutting down the industry. However, over this quiet time, many selling agents have been working hard listing properties for the spring season. Feedback from many selling agents is that whilst they are successfully listing properties for sale, stock levels are still low and are urging any vendor considering selling their property, that it would be a good time to put their property on their market.
On the other side of this, we are experiencing a reasonable amount of new enquiry from buyers who are looking to purchase, surprisingly higher than the amount we expected. These include buyers who still have not yet purchased (who were looking to buy pre lockdown) and new buyers looking to enter the property market. It is interesting to note that a large percentage of our new enquiry is coming from investors who are looking at the spring season to be a good time to buy in Melbourne and Regional Victoria.
Have a great week.
Kim Easterbrook
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A strong clearance rate of 92% was achieved over the weekend with many buyers and sellers trying to transact despite Melbourne being in Stage 4 lockdown. 165 auctions were reported, with 60 selling before auction, 90 at auction and there were an additional 183 private sales. Over the next five weeks there will be very few transactions but we are expecting the Melbourne property market to be very active once restrictions are lifted.
With metropolitan Melbourne in lockdown, Melbourne buyers are no longer able to travel to regional Victoria to inspect properties. With Melbournians making up a large percentage of buyers, this could result in some very good buying conditions in Geelong, Ballarat and other regional areas that we have not experienced before. Regional Victoria have Stage 3 restrictions imposed which means regional selling agents can still conduct private one on one inspections for regional residents only.
Geelong in particular is experiencing population growth from Melbourne residents moving there due to affordability, good schools and it is an easy commute to Melbourne whether that be by car or train. The lower price point in Geelong, Ballarat and other regional towns has also resulted in a spike in Melbourne investors due to the higher rentals yields and a lower price point.
There was a lot of confusion last week as to what the Stage 4 lockdown meant for the Melbourne real estate industry with notification that the industry was effectively shut down. This meant for people due to be moving houses in this time were left in limbo. On Friday, there was an amendment announced which now allows final inspections for both rentals and property settlements and people who were due to move house during this time can now do so.
Stay safe everyone and keep positive.
Kim Easterbrook
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Over the past few days we have been waiting in anticipation to find out what the Real Estate Industry can and can’t do during Stage 4 restrictions. On Tuesday, it was announced that in metropolitan Melbourne the industry is only allowed to work in an online and virtual capacity. This means all Real Estate offices are to close and all staff must work from home.
All physical inspections for the purposes of selling, buying and leasing are not permitted as of midnight last night. Online/virtual inspections and online auctions are allowed, however there are very few people that will purchase and lease a property from a virtual tour, therefore in effect, the industry has come to a grinding halt. We do not have clarification as to what this means for owner occupiers or tenants who are relocating during this time. The REIV are pushing for this to be a permitted activity but at this stage, this has not been agreed to. The government have advised that urgent maintenance can be conducted through time and property settlements can still take place.
In regional Victoria, stage 3 restrictions mean that inspections are allowed however they must be one on one, private inspections only. Auctions are now to be online as well. As buyers from Melbourne are not allowed to go to regional Victoria to inspect properties, this could present a good time to buy.
This does not mean that our works stops. Selling Agents will be busy trying to sell their current properties, listing new properties and working on properties to launch in six weeks time. Buying Agents will be busy liaising with Selling Agents to be kept informed about their new listings. Property Managers will still be busy in their day to day activities, creatively overcoming the obstacle of no physical inspections but still fulfilling their obligations to their landlords and their tenants.
Stay safe everyone and keep positive.
Kim Easterbrook
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An auction clearance rate of 78% was achieved over the weekend on 176 auctions and last week, there was an additional 154 private sales. In comparison, last weekend there were 292 auctions. Stock levels have been declining due to the recent spike in Covid-19 cases and vendors holding off selling their properties.
There is no need to elaborate too much on the state of the Melbourne property market today as we are expecting an announcement from Victorian Premier, Daniel Andrews, that could impact the way the Real Estate Industry trades over the next six weeks.
Once I have some clarity as to what the Stage 4 restrictions mean for buying/selling and leasing of residential properties in Victoria, I will send out a comprehensive outline of what we can and can’t do.
As at right now though, in Metropolitan Melbourne, there has been no change so we can still inspect and open properties via private inspection where one person is allowed through with an agent at any one time. Auctions are to be held online. In Regional Victoria, the implementation of Stage 3 restrictions means that there are no more open for inspections to be held, all inspections are to be via private appointment only and auctions are to be moved to an online platform.
For today, it’s business as usual, tomorrow though, is likely to be a different story.
Stay safe everyone and keep positive.
Kim Easterbrook
There was another strong auction clearance rate over the weekend with 78% of the 248 auctions reported selling. This is slightly down from 80% on 253 auctions last week but we are starting to see some consistency in the amount of auctions being conducted as vendors, agents and buyers are just getting on with things, even amongst the Covid-19 outbreak. In addition there were 261 private sale demonstrating that expressions of interest, off market transactions and private sales are still the preferred way of selling.
We are seeing a bit of a mixed bag of property results though with some suburb record prices being achieved, some selling well above reserve but the odd one passing in with or without a bid. For a property to sell well, it really needs to be ticking a lot of key boxes as there is understandably some nervousness in buyers. It firstly comes down to the property selection itself and then how it is marketed for sale. Buyers are drawn to properties that are presented very well, this means freshly painted, often updated/renovated, styled with display furniture and then marketed with high quality photos and priced accurately to sell. Properties that are priced too high or not presented well are often having some difficulty selling.
In addition to this, properties that are selling strongly are well located properties in a quiet street, close to shops/cafe’s, close to public transport, boasting a good floor plan and in a low density location. Properties that have the X factor and scarcity are the ones that are showing resilience in the current market from a selling and rental point of view.
There is no doubt the rental market has been hit hard with higher vacancy rates and an increase in properties coming up for lease. That being said, it is the properties that tick the investment criteria mentioned above, that are leasing out easier with higher quality tenants and near rents that they were achieving twelve months ago.
Stay safe everyone.
Kim Easterbrook
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It certainly has been an interesting week with the cases of Covid-19 in Melbourne rising to levels which almost triggered a Stage 4 lockdown. At this stage, the government have not introduced Stage 4 restrictions however the wearing of masks will be mandatory from Wednesday night which means the real estate industry can still operate for the purposes of buying and leasing.
A clearance rate of 81% was recorded on the weekend on 188 auctions, in addition to this there were an additional 186 private sales. In June, the amount of auctions was triple the amount for May, being 1,540 auctions.
The REIV have released the latest quarterly median prices which is consistent with the Core Logic data that was released a couple of weeks ago. The median house price for Melbourne dropped 3.5% over the June quarter after four quarters of continual growth. Unit prices dropped 2.5% in the June quarter. This demonstrates even with the utmost uncertainty in the country that the Melbourne property market has remained very resilient. Regionally, houses prices remained stable however the median prices for units increased to record levels. We have also had multiple reports of suburb record prices being achieved at Melbourne auctions.
On the weekend, we were successful purchasing a property at auction in Carnegie which had 19 registered bidders. Another online auction we participated in also had very strong competition with 9 bidders registering to bid. Online auctions are proving to be successful for both vendors and buyers alike and allowing the industry to transact whilst limiting face to face contact.
Have a great week.
Kim Easterbrook
Refer A Friend and Receive a $200 Voucher to Stokehouse.
Refer a friend to our Buyer Advocacy or Property Management services and enjoy a $200* voucher to Stokehouse Restaurant for a relaxing lunch or dinner by the Bay in St Kilda.
Please contact our team on 9592 1122 or email admin@elitebuyeragents.com.au
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