We had a glimpse of spring today.
Driving through the wide streets of Malvern, I was surprised to see the plane trees are already budding green and the cherry blossoms are out in full force.
Buyers are about to bask in the warming glow of even more screen time, with a lengthening list of new properties to scroll through on your real estate apps.
Next week will see the launch of the first official spring campaigns, with the 7th and 14th September slated to be solid auction weekends, the latter being a ‘September Super Saturday’ of sorts.
Two things can happen when stock levels increase.
Firstly, if sentiment doesn’t improve and the buyer pool doesn’t expand to meet the increased supply, then buyers will be spread thinner and it could put some downward pressure on price.
But this is not what we typically see.
Usually, more stock is a sign of renewed vendor confidence.
When sentiment is down – like during the banking Royal Commission and federal election in 2018/19, or the first few months of COVID in 2020, or when interest rates went up from 0.1% to 3.85% in less than a year in 2022, supply completely dried up.
When volume returns to the market, it generally means that vendors are not fearful of the market and believe it is a good time to get on with their property plans.
Buyers tend to follow suit. More stock equals more opportunity equals more impetus to act.
If this is the case, more listings draws out more buyers, and the increased demand can keep up with the increased supply, or in some instances (like in 2021) can outstrip supply and drive up prices.
Activity begets more activity.
Most sellers in our market become buyers. Most buyers become sellers.
So for every bought/sold property, a new, highly motivated buyer/seller emerges.
Melbourne has chronically underperformed most other capital cities for the last decade.
We are ranked sixth out of eight for house price growth since 2014 across the capital cities, as per below:
1. Hobart – 106%
2. Sydney – 78%
3. Adelaide – 78%
4. Brisbane – 77%
5. Canberra – 77%
6. Melbourne – 54%
7. Perth – 27%
8. Darwin – 3%
(Source: Greville Pabst Property Advisory)
It belies belief that the seven-time-in-row-ranked “world’s most livable city”, with the fastest growing population in the country (and one of the fastest growing anywhere in the world), can be outperformed by Canberra, Adelaide and Hobart! (No offense intended… All lovely little towns).
One would rationally expect that if we as a city can reemerge from the unfortunate aftermaths of COVID lockdowns, zero percent interest rates, onerous property taxation, etc, we will regain our rightful position in at least the top two or three cities for house price growth.
We have some serious catching up to do.
I wouldn’t be surprised if we see some 10-20% annual growth years ahead of us in the short term to medium term.
Alas, we shouldn’t try to predict the future or mourn the past.
The best time to buy a house is 50 years ago. The next best time is today.
Good luck!
Feature Property: 184 Kooyong Road, Toorak
David Sciola 