With the end of a year unlike any other now clearly in sight, I am pleased to report that the Victorian property market has performed remarkably well during the last quarter, as we forecast in our Market Update back in September.
The combination of an ongoing shortage of property for sale, and the pent-up buyer demand that was evident before the arrival of Covid-19, then exacerbated during the lock-down, has seen the property market bounce back far more quickly, and with more strength, than most people expected.
Looking back over the year, we saw a health crisis become an economic crisis for a lot of Victorians. What is clear is that whilst the landscape was constantly changing, the underlying resilience of our market ensured that each challenge was short-lived.
Now that we are in the final weeks of the year, we would normally expect the pendulum to swing in favour of buyers. However, to date we are continuing to experience mostly strong demand from buyers as listing numbers drop off. Crucially, all current indications are that this situation will continue into the first quarter of 2021, so we are confident that January to March will prove to be an excellent time to sell for Victorian vendors.
Some economists have now forecast that we could see price growth in the order of 8-10% next year. However, these opinions come from the same experts who forecast drops of more than 15% for the same period, only a few months ago. So, read into that what you will.
From our perspective, we see there are still some uncertainties about what could happen in the market beyond the first quarter of next year. With the removal of JobKeeper and the expectation that banks will bring to end this period of mortgage freezes, it’s clear that there are still some economic bumps in the road ahead. Adding to that, we will also see the removal of the moratorium on rental evictions in March, so we expect a higher than normal ratio of rental properties to hit the market after this time.
With so many changes scheduled, there is likely to be a marked increase in the number of properties for sale both from owner occupiers and landlords keen to cash up and reduce liabilities. We expect this increase to become more apparent from the second quarter of 2021 onwards, so factor this into your timing if you are planning on selling next year.
Given the positive outlook for the early part of the new year, our team will be available right through the holiday period to assist you with your planning and to help you to take advantage of the opportunities that are available, (whether you are buying, selling or both). Please give us a call and we’d be happy to talk you through the best plan of action for the new year.
Last but not least, on behalf of everyone at Ian Reid Buyer and Vendor Advocates, I would like to wish you, your family and friends all the best for the coming festive season. After such a challenging year, I hope you get to enjoy a safe and relaxing break.