The short lockdowns earlier in the year had no significant impact in the real estate market in any sense. But Lockdown 6 is different.
The current lockdown is lasting much longer than the previous ones. It has significantly affected existing campaigns, paused/delayed proposed ones. According to our Melbourne E-Team real estate member McRae Property, the most significant impact is without doubt to cause a significant percentage of prospective purchases to decide not to sell in Spring 2021 because of the risk of Melbourne going into lockdown 7.
Agents all over Melbourne shares the same sentiment. The only question now is the quantum of the effect on the stock supply. McRae Property’s guestimate is circa 30% less than would otherwise have been the case.
Stock that does come to market, with high quality stocks have higher potential, will be keenly sought after and prices are expected to continue firming. Continuing the trend that began in the Spring of 2020 when Melbourne came out of the long lockdown of that year.
Buyers are still actively looking into the market and business is expected to continue as usual.
Melbourne is a very large city even when viewed on a world scale.
It has a larger population than Rome, Montreal, Berlin or Athens and is only slightly smaller than Barcelona, St Petersburg, and Sydney.
Having a very significant population and a considerable geographic area, there are a number of differing precincts in our city that will appeal to expats seeking particular lifestyles, amenities and/or property types.
Malvern and Hawthorn in the inner southeast are very family orientated being extremely well serviced by public transport and featuring most of Melbourne’s best private schools, leafy gardens, and excellent shopping strips.
Albert Park and Middle Park are two spectacular inner bayside suburbs that offer wide streets, fantastic cafés and easy access to the city.
How do you know where to buy? Or when and how?
McRae Property is here to help. Download our guide to learn more about Melbourne, tricks on finding the best property for you and to find out why you need help.
To download our guide, click here
The general Melbourne property market is being adversely affected by the repercussions stemming from the Banking Royal Commission and a tightening of APRA (the banking governing body) provisions with respect to lending practices.
In our view, the regulators have overshot the mark with the effect on buyer activity plain to see every Saturday at auctions around the city, with property failing to sell or even attract bidders in some instances.
The Credit Squeeze
In essence, we are in the middle of a credit squeeze. Pure and simple. It is not a matter of purchaser’s intent being affected. It is their capacity to actually borrow (a sufficient amount of) money that is the issue.
This is, of course, very much a double-edged sword which, depending on your circumstances, will be either good or bad news. For instance, if you have finance approved or better still, don’t need any finance, you will be in a very strong bargaining position.
The Opportunity for Expats
Many of our Expat clients are seeing this as an opportunity to get into a softening market for the first time in about 6 years. Our advice to them and all of our other clients is simple.
“Hasten slowly”. What does that mean? There is no need to buy a property “tomorrow” as the current financial environment is likely to prevail (at least) during 2019. Having said that, there is nothing wrong with buying the right property if it presents itself. Trying to pick the bottom of the market is a high-risk strategy as the Melbourne market is notoriously resilient. Particularly with circa 120,000 people moving to our city every year.
You don’t want to wake up one morning and the market has turned. And it will happen, it’s just a matter of when.
So no hurry (yet), take it slowly, find the right house (ie. let us find the right house for you!), do all the appropriate due diligence and buy it for the right price.
In our view, you have 12 months to do so. After that, I make no promises!!