Property Report - May 2019

The new normal

I caught up with a bank valuer the other day. If you want to get a pulse on how the market is going, it is these kinds of professionals who will give you the best insight. They are on the factory floor every day and are more attuned to trends, certainly more than reporters or the media.  

This valuer had a new catch phrase: “the new normal”. By this he was referring to current pricing, claiming that it has returned to some regularity and expectation. This checks out because last month the Integrity team noticed that there are more buyers in the marketplace and that sales are picking up, compared to the slower months of March and April. And all this with winter on the way.

You see, the seasons are not as important as the economic conditions.

Perhaps now that buyers are less spooked by sensationalist reporting and unknowns surrounding the election, they are more comfortable making the next financial move. After all, people can only wait so long before they have to get a wriggle on.

Unemployment is at a record low, the lowest in eight years in fact (according to the Reserve Bank). And at the same time housing affordability is way up. We have seen a boost in first home buyer activity, which means that if you think your property sits around the $500,000 mark then now is a good time to sell. It is interesting to note that a recent flush of land into the Kinglake market has drawn quite a few first home buyers out of the woodwork, with land values around the mid-$200,000 range. Some of these buyers can only afford land at this stage, emphasising our lack of affordable houses for sale.

Time and time again it is the lower and middle bands of any market that remain resilient.

As always, lifestyle and affordability are the two main drivers for buyers right now. Value-for-money is the foremost consideration for buyers, and this will carry the Kinglake Ranges and surrounding markets through any tough conditions.

For anyone buying, the environment could not be better. Lenders are incredibly competitive at the moment, with households securing interest rates below 3.49% in some cases. These numbers are unprecedented.

It is somewhat humorous that prior to the election, the prime minister and opposition leader came out in favour of a leg up that supported first home buyers with only 5% deposits. It seems like ancient history now that the Royal Commission flogged banks for “irresponsible lending”. How quickly people’s opinions of a market downturn shift… This is all evidence that we are climbing out of the negative atmosphere and looking towards more favourable conditions. But vendors take note: it is still worth being practical when marketing for sale, as we aren’t completely on stable ground just yet.

As always, for any advice relating to renovation, lifestyle change, investment, or other property related matters, the door at Integrity Real Estate is always open.

If you would like to have a chat, give us a call on 5786 2033.