Whilst there are still a few property sales that are yet to be finalised over the next couple of weeks, both under the auctioneer’s gavel and through private negotiation, I thought this would be an opportune time to look back over the past 12 months to see what lessons we can learn about our property market.
One of the most interesting insights came about when I looked back at our January Market Update, where we looked at the forecasts for 2017 from a number of leading economic commentators. Whilst those predictions varied, it’s fair to say that most forecasters were relatively conservative in their outlook for the Melbourne property market. Rises of between 4% and 9% were prominent.
In reality, the ongoing increases in Melbourne’s median property price exceeded all but the most optimistic forecasts, with the most recent data from the REIV indicating year-on-year growth of 14%.
What has been even more noticeable has been the price growth in many of the areas that have been ranked among our most affordable suburbs. Areas like Frankston North, Sunshine and Ardeer were ranked among Melbourne’s Top 10 suburbs for median price growth recently, whilst spots like Werribee, Point Cook, Cranbourne, Clyde, Pakenham and Thomastown have also experienced a real upturn in 2017.
The State Government’s decision to increase assistance for first home buyers in July of this year has clearly had an impact, with lending to first time home owners at its highest level for several years. However, we should not overlook the impact that the continuing shortage of available property for sale is having in most areas and price ranges. From our perspective, it seems that most agents across Melbourne have been operating at around 70-80% capacity for most of the year, meaning buyers are forced to compete strongly in order to secure their chosen property.
Whilst there were signs towards the end of the year that this imbalance was easing in many parts of Melbourne, and particularly in the inner to middle ring suburbs, it would be unwise to assume that this will still be the case at the start of 2018.
So, whilst it’s fair to say that the property market as a whole in 2017 has out-performed most people’s expectations, the market we are dealing with today is one where careful planning and experienced advice are key ingredients for those who want to achieve the very best results possible.
If you, or one of your family are thinking about making a move in the foreseeable future, history has taught us that those who make their move early in any New Year often reap substantial benefits. This is likely to be the case in 2018, particularly as there are still many motivated buyers in the market who will not be able to secure a property before the holiday break, and will therefore be watching the market closely in January to see what opportunities emerge.
Remember, if you would like any assistance or advice on any property matter, our Advocates will be available to assist you throughout the festive season, so don’t hesitate to call.