Melbourne Property News Monthly Wrap – February 2024

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Melbourne Property News - Buyer Marketing

Clearance rates run hot in February buyers’ market

Over February’s first two weekends the Real Estate Industry of Victoria (REIV) recorded more than 1,466 auctions. 1,177 properties sold, 879 at auction, with 289 passed in. 273 properties were sold before auction with 25 properties selling after auction. The clearance rate averaged 78.50%, way up on December’s 73.50%.

Halfway through February we’ve seen a sharp jump in the clearance rate compared to how it was easing back in last year’s December quarter. Demand has picked up and buyers are competitive and more determined to secure a property.

What buyers need to know about the market right now

Although most other capital cities have seen substantial home-value growth over the last 3 years much of Melbourne has been in the non-growth, or minimal value growth part of the ‘property-clock’ cycle.

At Buyer Marketing we keep pointing this out because it’s unusual for Melbourne to be so clearly out of kilter with other east coast capitals. Fact is, buying conditions in Melbourne right now are terrific compared to the rest of the country.

It’s a great time to buy

CoreLogic data shows dwelling values in Melbourne were actually down 0.1% over January. Melbourne home values have increased only 15% (PropTrack) since Covid arrived and upset the applecart early in 2020. But over the same period Sydney home values have risen over 30%, Brisbane’s rose by around 56%, Adelaide is up nearly 60% and Perth is up 46%.

Melbourne price rises have missed the bus. Which is an ideal time for buyers to get on board!

It’s a unique opportunity to buy before the next price hike.

Rates stay on hold

In February’s first week the RBA kept the cash interest rate on hold at 4.35%. The RBA is always conservative and warned that rates could even increase again, depending on conditions. But Australia’s financial markets are more bullish and are betting on the first rate cut happening around August. If this does happen it will increase the amounts people can borrow, put more buyers in the market, producing conditions where home values rise.

Why rents have jumped so much in Melbourne

According to property analysts CoreLogic, Melbourne rents shot up 3.8% in the December quarter and 18.3% over the last year. ‘Skyrocketing’ is a word that fits.

A lessor factor here is property investors (landlords) are being driven out of Melbourne by State Government taxes and policy and have been selling up, reducing the number of homes available for rent.

But the predominant factor is the 200,000 migrants who arrived in Melbourne in 2023, the majority of who are renters for the first few years. These annual cohorts of new arrivals get straight to work building up their mortgage deposits. After getting established they buy entry level properties, to keep for 10 years or so before many trade up again. Over the next few years (granted interest rates ease down) this market churn will contribute to an upswing in home values.

Peter Fox
Principal Advisor &
Licensed Estate Agent
Buyer Marketing

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