You might not be convinced, but the property market is on the rise again.
Melbourne’s property market has experienced a season of decline over the last eighteen months; resulting in reduced buyer activity, fewer auctions being called, a steep increase in properties passing in, and properties spending more time on the market.
Certainly not ideal for vendors; but a strong buyer’s market with reduced competition and declining prices.
If you’re waiting for the property market to continue its downward spiral, wait no more.
With recent interest rates cuts, easing of the APRA lending regulations, and the Federal Election done and dusted, buyer activity is increasing.
Here are four signs to indicate why:
Melbourne’s clearance rates are increasing
If you follow Melbourne’s property market very closely, you would have noticed by now that the weekly Auction clearance rates are on the rise.
Infact, in the week ending the 30th June, Melbourne’s clearance rate was 73%; with the clearance rate being a mere 62% this time last year.
For the most part of 2018, it was not uncommon for clearance rates to linger around the 60% mark; at times dipping below as much as 50%.
Since the Federal Election, Melbourne’s clearance rates have been soaring and has been consistently lingering around the 70% mark, give or take. This is certainly a strong indication that post-election, buyers are entering the property market backed with stability and confidence.
What does this mean for home buyers and sellers? It means that more properties are successfully selling under the hammer again, and more buyers with their finances organised and approved, ready to purchase in an unconditional sale.
Buyer numbers and activity is increasing
Further to the above point, there is a strong indication that buyer numbers are on the rise.
And no, it’s not just numbers through open homes.
We’re talking real quality buyers who are bidding at auction with unconditional approvals on their finances, and buyers who have an increased capacity to borrow more from the bank.
Just in the last few months, the Australian Prudential Regulation Authority (APRA), the statutory authority that oversees the banking and financial systems in Australia, recently eased the lending criteria for those seeking home loans, making it far more accessible for buyers to borrow money.
Interest rates are also at a historically low level at 1%, making it easier for buyers to enlarge their borrowing capacity with reduced minimum repayments for their mortgages.
Properties are spending less time on the market
One of the factors contributing to the recent spike in Melbourne’s auction clearance rates is the fact that properties are spending less time on the market.
Rather than waiting for a property to pass in and negotiate a deal post-auction, buyers are increasingly acting with confidence and purchasing under the hammer.
Given the season of decline in the property market, the challenge for many vendors has been the need to reduce their reserve price in order to meet the declining market value. For good reason, many vendors are afraid to under-sell their home, resulting in properties staying on the market longer.
However with increased energy and momentum amongst buyers, we expect properties to spend even less time on the market over the coming months; particularly with spring around the corner.
Now is the time to buy
If you’re currently sitting on the fence waiting for a better time to buy at a bargain, it’s time to look at the stats and think again.
Considering the points above, the property market is on the rise, as it seems.
With historically low interest rates, more accessible home loans, and clearance rates as much as 15% higher than last year, you can be assured that the slump that Melbourne’s property market has experienced has passed.
At Nguyen Real Estate, we are passionate about helping buyers purchase properties confidently, with care and with ease. You can view our current properties for sale here. Contact us on (03) 9587 6070 today if we can be of service to you.