Now that the new year is officially under way, and we can happily leave most of the challenges of 2021 behind, I thought this would be an opportune time to look at what we learned from the past twelve months as well as looking ahead to consider what 2022 may hold for the homeowners of Victoria.
Perhaps the most important lesson to be learned from the past year is the underlying confidence in the local property market, despite the challenges of multiple lockdowns and other pandemic restrictions. The first part of the year provided a classic demonstration of what happens when demand is strong and the supply of properties for sale was limited. Even in the midst of restrictions on property inspections we saw occasions where there were as many as 20 separate buyers for individual properties, creating enormous competition and remarkable prices.
In a normal market we would expect stock levels to hit their peak in November, but 2021 was anything but a normal year. Due to the delayed start to spring sales because of lock down there was a huge bottle neck of listings. The affect this had on the market was the flow of new listings went from barely dripping to a raging torrent within a matter of weeks. This crammed a record number of sales into a condensed period of time at the end of the year. In real estate we classify any weekend with more than 1,000 auctions as a ‘Super Saturday’. To highlight how intense the increased volume of stock was, from October 16, Melbourne recorded 11 consecutive “Super Saturdays” and finished the year with 3 weekends with more than 2,000 auction, including 2420 auctions held on the final weekend before Christmas. This smashed the previous records for auctions recorded on any one week and month.
Not surprisingly, this swing in the market saw some tempering of the level of buyer competition for most listings. The ‘A-class’ listings still produced excellent results, but most homes required closer attention to pricing and presentation in order to get the desired result.
The good news is that the build-up in stock levels has been clearing through the past few weeks, and will continue to do so through January, so we are expecting a return to last year’s shortage of available properties by the end of January. Of course, it is likely that the current situation with Omicron will make some sellers more cautious, reinforcing the shortage. That’s great news if you are considering selling in early 2022.
Looking further ahead, whilst Melbourne’s property prices grew by around 15% last year, we expect a more balanced market this year. It is also worth keeping in mind that the majority of a gentler rate of growth is likely to occur in the first half of the year, as the second half of 2022 is likely to be disrupted by both State and Federal elections, along with increased talk of possible interest rate rises.
In these circumstances, our recommendation for anyone planning a move this year is to consider making that move sooner rather than later, when the market is likely to benefit from higher levels of confidence and certainty.
Of course, if you are weighing up your options and would like some obligation-free advice on how to make the most of the current market, our team is ready and able to assist. Don’t hesitate to give us a call this week.