Our Update for March comes at an interesting time in the Victorian property market. An analysis of the results that agents have been achieving so far in 2018 shows that there is a divide in the way the market is performing, depending on the location and price range of your property.
On one hand, properties in the outer suburbs and those in the lower price brackets are continuing to attract strong buyer competition in most cases. This trend is also apparent in the regional areas of Victoria, with the REIV reporting that average selling times for property outside the metropolitan fringe were five days shorter in February this year than they were for the same period last year. That’s quite a step up considering that 2017 was already a strong year for the Victorian market.
However, what has also become clear is that properties closer to town, and in the higher price brackets, are tending to find it tougher to attract the level of competition we were experiencing six to twelve months ago.
This slight softening in demand has also been reflected in the auction clearance rates so far this year. Whilst the published figures showing clearances of 65-70% may seem reasonably strong at first glance, it is important to keep in mind that there has been a higher percentage of ‘unreported’ results this year. In most cases, these non-results are passed-in, so when you add them to the reported numbers, it is clear that there are less properties being sold under the hammer than there were at this time last year.
This change in the market is particularly relevant when it comes to selecting the right agent to handle your sale. Whilst the market last year was one where most auctions saw multiple bidders competing strongly, there is now a growing focus on the agent’s ability to negotiate one-on-one with buyers, both prior to auction day in some cases, and immediately after the auction in others. This is one more reason why having an independent Vendor Advocate by your side when selecting your agent is so important.
On a positive note, the past month has also seen a change in the outlook on interest rates. As we all know, interest rates have been a powerful influence on our property market in recent years. So, whilst the Reserve Bank decided to leave official interest rates on hold again this month, it has been interesting to see the banks cutting rates on several mortgage products.
For those that may have missed this news, the Big 4 Banks have all reduced their interest rates on several of their fixed rate loans during March, with cuts of up to 0.5% being offered on loans of 2, 3 and 5-year terms. We have also seen at least one of the Big 4 introducing discounted rates just for first home buyers.
The reason these moves are particularly important is that most commentators feel that the lenders would not be locking themselves into these rates unless they were very confident that the RBA will not be raising official interest rates for quite some time. That level of confidence, along with the overall reduction in interest rates, can only be a positive for the property market overall.
If you would like any advice or assistance in navigating your way through a property market that is becoming increasingly complex when it comes to maximising your result, don’t hesitate to give us a call at Ian Reid Vendor Advocates.