Property Report - November
I was speaking to someone the other day who made the off-the-cuff comment that they “should have bought in Kangaroo Ground 5 years ago.” A novel idea, when the median price there hovers around $1.62 mil. It got me thinking, I wonder how many people will regret not buying in the Kinglake Ranges in 5 years? Or rather, how many people will look back on their investment and think, that was a great move.
We are conditioned to look to the immediate future, the present, the now, so much so that our political opinions, property choices, and personal decisions often don’t take into account the “known unknowns” of 2, 4, and 6 years in advance. It is a consumer-oriented world in which live, and the consequence of this is that we struggle to think about the big picture.
The recent bad press about the property market is a perfect example. The media, by and large, must have a lot of fun with influencing public opinion. These days it is easy to do. We seem to sail headline on headline. It is the astute investors who look above the public fuss and really hone in on the reality, be it politics or property.
Buyers – there is a lot of choice in the marketplace this Spring. It has been a while since the Kinglake Ranges has enjoyed such a bounty of stock. Twelve months ago, there were not enough properties to go around, and now there is a healthy number bringing in a healthy spirit of competition. Across all fronts, the only difference in conditions to twelve months ago is a longer average days on market. My advice is to do all your homework before you seriously look. Come ready to buy, so that you can have the best chance of pulling the trigger on what you want.
What we are seeing in the outer metro area at the moment is a high number of properties for sale between $1 mil - $2 mil, as homeowners push to make a move to regional areas. There is more stability in the regional market than the metro market, but vendors should be aware as these trends may have a delayed effect. The old adage of Melbourne money coming into regional areas is also largely a myth, as the recipients of metropolitan sales generally make the move to downsize on debt.
It is in those inner metro areas that true corrections are being felt, but a word of warning: just because million dollar properties are dropping 10 - 20% in inner suburban markets, it doesn’t mean that properties are more accessible for first home buyers across the board. The gap is simply closing between properties at the market ceiling and those in the middle band.
As discussed earlier, the robustness of Kinglake’s market has been its greatest asset, for it is still an area where purchasers will see steady, sustainable growth, perhaps not immediately, but over a period of approximately 5-7 years.
This means that vendors considering selling now should be aware that we are at the top of the hill as far as values are concerned. This also means that we are catering to a very specific market.
To pick up first home buyers, properties need to be priced according to their category, generally below $600,000. With tightening lending restrictions, first home buyers will revert to staying home longer if they cannot afford a property. This means that the demographics that have entered the regional market over the past 12 months will likely not change in the near future.
The predominant buyer in the Ranges at present is the young family, with either an investment or a primary place of residence to sell. It is the requirement to sell these properties that has extended the average days on market, as buyers are stuck in the consideration of whether to buy or sell first. Vendors should be aware of these timeframes, and plan accordingly. Now that we are 60 days out from Christmas, Vendors planning to hit the market should take the festive season as a gift and instead consider hitting the market in January.
As always, consult your local professional for all advice on presentation, preparation, and marketing tactics at 5786 2033.