Looking back on our February report card I would say the Stonnington market received a solid B+ for the first selling month of the year.
Clearance rates held up nicely (79% for the month according to the REIV) as did prices, with some highly competitive Auctions and knock out results, particularly in Armadale, where we saw a nicely renovated weatherboard house on 380sqm selling for over $4m and a semi-detached single fronted three bed, one bath without parking sell for just under $3,000,000.
Those prices would have been unfathomable a year or two ago.
However, we saw many properties sell via negotiation after passing in, with far more properties sell within the range rather than (well) above, as was the norm for most of 2021.
This is as much about vendor’s expectations getting ahead of the market than prices falling short. The higher the reserve, the more likely they are to pass in.
Either way, the market looks and feels to be in transition.
The first three quarters of 2021 were a low stock, high demand environment, supercharged by lockdowns and an air of desperation to upgrade one’s living (isolation) arrangements.
Since Q4 2021 we have entered a moderate-to-high stock level, moderate-to-high demand environment, which has resulted in a much more balanced market.
The fact that prices and clearance are holding up would suggest that we are currently on an even keel, with great opportunities and fair prices for both buyers and sellers.
But it wouldn’t take much to tip the balance from a seller’s market to a buyer’s market.
Market commentators, who 60 percent of the time get it wrong, every time (to steal a quote from Anchorman) are now predicting fairly flat or minimal growth for 2022 followed by price falls in the vicinity of three to 10 percent for 2023.
Scarcely do they realise that their margin of error tends to be in the order of +/- 30 percent, given their previous track record of predicting house prices.
Maybe it would be more helpful to say that a good family home in Malvern on 600sqm will cost somewhere between $2,500,000 and $5,000,000 in 2023. I’d say that’s a fair bet.
We are currently listing some exceptional houses that will come to market in the coming weeks for early April Auctions. Stay tuned.
David Sciola 