Hopefully you enjoyed a quiet and sunny long weekend as Melbourne gently kisses summer farewell and we shove the beach towels in the back of the cupboard and pull out the footy scarves for round one.
There was no auction activity to report over the long weekend, but we are now looking forward to three solid auction weekends in a row to close out Q1 of 2023, which may or may not turn out to be the turning point of this market cycle.
Here is my take on the current market:
We are in a very low stock, low choice environment driven by a hesitancy (justified or not) from vendors to go to market unless their motivation is high.
As vendors gain confidence that selling conditions are good and improving, we hope this will drive listing numbers to more normal levels later in the year.
Buyer demand is healthy, demonstrated by strong inspection numbers and multiple bidders at auction for box-ticking homes.
Prices are holding up exceptionally well. Most properties are selling above our expectations, and very few are selling for below par.
Quality homes that are conservatively priced are selling under fierce competition at or before auction with multiple buyers.
Quality homes that are priced at fair value seem to be transacting at fair value with just the one buyer – before, at, or shortly after auction.
Quality homes that are overpriced, or average homes that are not representing great value, are languishing.
When you match this with clearance rates in the 80s (Jellis Craig) and around 70 percent (REIV/Domain), this paints a picture of a competitive and scarce market environment with more upward pressure on prices than downward pressure… As of now.
Of course, the market is fluid and things can change at any moment.
Banks collapse, stock markets crash, viruses cause havoc, interest rates go up and down, tax policies change, etc.
Either way, most people hold their homes for 5 – 10 years at least, so I’m not sure why buyers try to perfectly time their purchase to the week or month in the hope of a slightly better deal.
One thing we do know for certain is that these beautiful Victorian homes in Stonnington that have stood strong for 130 years just keep getting more popular, more scarce, and more expensive over time.
People very rarely regret buying them… at any price.