First and foremost, a huge congratulations to our very own superstar, Carla Fetter, for absolutely crushing her AREC speech to over four thousand real estate agents on the Gold Coast on Sunday.
She did our team, our office, our network and our industry proud as she inspires a new generation of agents with her candid and authentic story of her 18-year journey in real estate from a receptionist to a Director and top 5 agent in the state.
Well done, Carla!
Between Easter and the election things were looking a little bleak.
There were some low clouds hovering over the property market – a certain dampness – comprising looming interest rate hikes, election uncertainty, negative sentiment and fear mongering propagated by the media.
I’ll be the first to admit I had my concerns around the market softening being more of a deep impact than a soft landing.
But the last 10 days feels different. Better.
Carla and I were involved in nine transactions in the week following the election and we had some surprisingly strong results…
Two sold before auction well above the range – one was $225k above and the other $150k above.
Four sold at auction with competition, all above the range with multiple bidders.
Two passed in at auction and sold within the range.
One private sale sold at the full asking price.
Our team achieved 100% clearance for the week. The overall clearance rate across all 30 Jellis Craig offices was over 70%.
Is this just a post-election bounce or has the market stabilized after a bumpy few months?
I called the “turning” of the market on Cup Day weekend 2021. Once the lockdowns finally ended many people put property on the back burner and got on with their social lives. Our inspection numbers halved overnight.
The frenzy ended and demand started to taper just as volume really ramped up.
December 2021, which had the highest number of sales of any December since 2016, was very soft.
Mind you, when I say the market “turned” I mean it changed from an insanely strong, never-seen-before bull run to a more normal, ‘good‘ market like we experienced from 2012-2017.
The big question remains as to whether the predicted, unprecedentedly aggressive rate hikes materialise and potentially unwind all of the market gains from the previous 18 months, or, whether the rate hikes end up being a storm in a tea cup and we only see modest increases in rates and modest falls in prices (if any).
The banks have already been quietly lifting rates in anticipation for over a year.
In late 2020 you could get a four-year fixed loan for 1.94% with CBA. I know because I got one.
Now the same four-year fixed loan with the CBA is 4.84%.
So (some) mortgage rates have already increased by nearly 3.0% even though the cash rate is up just 0.25%.
In my opinion, there is no way that fixed mortgage rates will go up by a further 3.0% from where they are today within the next 12 – 18 months. It just won’t happen.
You can’t go from sub 2.0% mortgages to over 7.0% in less than two years or there actually will be blood on the streets.
It is in nobody’s interests for this to happen. The RBA are notoriously inaccurate with their forecasts.
If the cash rate makes it to over 2.0% by the end of the year I will gladly eat my words.
But anyway, at Team Fetter/Sciola we try to live in the present and control what we can, which means getting the best possible results for our clients.
Things are looking up this week!
The market is not crashing. There are plenty of good buyers out there and very few quality properties for sale.
Don’t expect a bargain anytime soon.
Feature Property: 48 Moore Street, South Yarra