The market has been on an incredible tear. A once in a generation, once in a career bull run like many of us have never seen before.

Our average annual capital growth rate in Melbourne has been 6.8% over the last 25 years.

We’re up at least 20% this year. That’s half a million dollars for the average house in Armadale.

In Prahran we have seen the same houses selling for 30 percent, even 40 percent more than they were purchased for just 12-18 months ago.

This growth rate is completely unsustainable. And at some point, things will calm down either gradually, or abruptly. More likely the former.

It may well be happening right now.

We were expecting things to pick up further once open inspections resumed. That might have been optimistic, given how strong things already were.

If anything it has been the opposite. Our inspections have been rather slow the last two weekends, averaging 5-10 groups through a good house.

We are getting less buyers inspecting our opens now than were inspecting via private inspection during lockdown, which is surprising. We were seeing 15-20 groups through a good house. And by ‘good’ I mean broadly appealing and reasonably priced.

Colleagues are murmuring about things being a bit flat, even. Cooling?

But two quiet weeks of opens does not constitute a slowing market. It is far too early to call it.

Real estate may be taking a back seat for a couple of weeks while people adjust to their newfound freedoms.

The worse-than-ever traffic suggests people are out and about. Maybe they are busy getting haircuts, going for lunches or visiting family and friends, rather than inspecting properties.

There is also plenty of chatter about interest rate rises, and banks are already lifting fixed rates. (I should have fixed in more at 1.89% for four years!)

Surely this isn’t already having an impact on the market though? There’s usually a lag.

Of course, there is still plenty of evidence that the market is tracking along nicely, even if not at the fever pitch of a few weeks ago.

Prices continue to be very strong, days on market are short, clearance rates are high, and most stock is being sold above the price range rather than in the price range, or below, like in previous downturns.

If the market goes from red hot to just hot, technically it is cooling… But it’s still hot.

Feature Image: 48 Packington Street, Prahran

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