I’ve often said that I’m not here to make predictions, only observations.
So I’m somewhat hesitant to suggest that the market is about to take off again for certain, but I do believe we have enough evidence now that the market has bottomed out and is already some months into an upturn.
Yesterday’s rate hike was unexpected, with only a 10 percent probability of a 25bp increase predicted by market analysts.
The RBA cited the rebounding property market as one of the reasons for their decision.
Either way, the consensus remains that we are very close to a terminal cash rate of around four percent, give or take, and we’re pretty much there already.
The IMF recently downgraded their forecasted global economic growth, and things are still shaky around the world.
It seems we are perpetually just one misstep away from a global financial crisis, but the new world is a volatile one and gone are the days of stability and predictability.
Fortunately, most people are happy to get on with their lives rather than dwell on any existential threats to humanity, and this has become evident in the recent, significant improvement in market sentiment in Stonnington and across Australia.
It looks like the market has turned around this year.
After 12 to 18 months of hesitancy, people are finally getting on with it.
Things are looking up. Competition is back, clearance rates are well up, prices are clearly on the rise across the board.
Any active buyers, agents, buyers’ advocates, property valuers, conveyancers or even now journalists will tell you that the market feels much better now than it was at the end of last year.
Many properties are selling above expectation, which is clear sign of a strengthening market.
Once again Jellis Craig saw a bullish clearance rate of 84 percent across 68 auctions on Saturday. The REIV reported 80 percent clearance across Victoria.
I’ve seen articles this week in the AFR, The Australian, The Age, The Herald Sun, REA and Domain citing CoreLogic or PropTrack data that prices in Melbourne and Sydney are up a non-trivial amount since February.
Of course, the media get it wrong most of the time.
The banks have predicted 67 of the last three market corrections!
So maybe we’re calling it too early and things will get tougher later in the year. But I wouldn’t bank on it.
If you’re a buyer waiting for the bottom of the market, don’t be surprised if it’s already past us.
If you’re a vendor waiting for things to improve further before selling, that is understandable.
But I would challenge whether it would be smarter to take advantage of stock levels that are 25 to 50 percent below normal, and the current competitive environment from buyers, to beat the potential rush of sellers later in the year if and when prices improve further.
You see, the market may trend in a directional manner, but each individual sale can be a significant outlier from those trends.
A great result in May 2023 with five bidders (because there were no competing properties on the market), might be considerably higher than an average result in November 2023 (in a pass in and negotiation because buyers were spread thin over many listings), even if the market gains a hypothetical five percent over that period.
Without dwelling on hypotheticals or trying to crystal ball the future, one thing we know for certain is that selling conditions are very good right now.
Buying is currently the far more challenging side of the transaction, due to the significant lack of stock.
While I don’t like to make predictions, I am happy to provide this unsolicited advice to buyers… if you find something you like and you can afford, buy it. Now.
Feature Property: 17 Stewart Street, Windsor
David Sciola 