The Melbourne property year is up and running with the first auctions being called, but not as many as usual. Some would-be vendors are staying put and refusing to sell. So it’s a different property year. We see a few trends and two threats, one external and one internal.
The setting for real estate buying and investment overall is quite good, with the latest NAB Survey reporting improved national growth, reasonable employment figures, the continuation of cheap mortgage finance, and, for Melbourne and Sydney, still good/strong growth in property values.
The Local Threat : the lack of property for sale.
Through StrategicVendorAdvocates.com.au, our Vendor Advocacy Service, and talking to agents at buying inspections, we collect a lot of anecdotes on stock levels. The most extreme we have heard is 40% less stock on the Mornington Peninsula (a more discretionary sales market), 35% down in the outer southeast, and in many suburbs, 20%-25% less property for sale available to buyers than in 2015, with levels having dropped through 2016. Many homeowners (being either an upgrader, relocator, or downsizer) are reluctant to list their property for sale because they are not confident of buying their next property in the style, size, and suburb they desire.
Our solutions
For investors and first home buyers, hire the services of a professional buyer or you will be spending a lot of your year trying to buy, may become frustrated and could end up buying an inferior property. Or you could overpay, just to complete your mission.
For those changing to another property, whether an upsizer, relocator, or downsizer, use our well-honed Strategic Double, our Complete Buying Service, paired with our Vendor Advocacy Service, where we have both the sale (using a selected selling agent,) and purchase, going at the same time.
The External Threat: the United States under its erratic new administration. Economists predict that a huge infrastructure spend there, and/or U.S. corporate tax cuts, could lead to higher US interest rates with a flow-through to higher mortgage rates in Australia, currently well below long-term norms.
Our Solution
If you intend to buy property in 2017, get going now while interest rates are cheap. We have a range of approved mortgage brokers (no referral fees to us) who can access historically low mortgage rates and products, and you can choose to lock in the interest rate for several years, if you desire.