A great April for buyers
Over April’s first three weekends the Real Estate Industry of Victoria (REIV) recorded more than 2,938 auctions. 1,668 properties sold, 1,238 at auction, with 521 passed in. 428 properties were sold before auction & 2 properties were sold after auction. The clearance rate averaged 77.5%, only very slightly down on March’s 78%.
The April auction market started with two huge weeks and then eased off for the Easter holidays. Home price growth momentum stalled again across March with Melbourne values actually falling by 0.1% (CoreLogic). But after 2021 delivered the third fastest period of home price growth in Australia’s history, peaking values had to ease off eventually.
Playing field is changing again for buyers
It’s a great time to buy a property and although the market is stable the auction environment has changed again in Melbourne. With plenty of supply and cooling values, April bidders are holding back more at auction. The shift is more to behind the scene negotiations and tactics. We know all the ins and outs of this and with Buyer Marketing batting for you, you’re in the best position to secure the property you want!
Plan ahead for rate rises
Buying a home right now is going to take some extra planning for expected interest rate rises. The Reserve Bank usually doesn’t suddenly jack rates right up but tends to creep them up. A quick look at the figures below shows how much extra money you’ll need when this kicks in:
Currently, home loan interest rates average around 2.52%. So if a house costs 1.3M, after your 20% deposit the loan is around 1.09M, with monthly payments around $4342. If the mortgage rate goes up an extra .5% to 3.02%, you’ll need an extra $290 a month, or $72 a week.
Or, if the mortgage rate goes up 1.5%, to 4.02%, you’ll need and extra $900 a month, or $225 a week.
What’s supporting home price values in 2022?
There are also some factors bolstering values in 2022. This includes increases in equity homeowners have gained over 2021, which will prompt them to go to market and upgrade to a more expensive home. Also, at the modest end of the market continued Morrison government support for first home buyers helps support values in that range.
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