The Spring season for selling in real-estate has kicked off on an excellent note, solidifying the growing signs of a significant market recovery. So far, September has returned auction clearance rates at above 74% each week, with properties soaring at values of over hundreds of thousands of dollars. Some homes are even selling for over $1 million past their reserves.
Sellers are back in the driver’s seat, although a lot of homeowners still feel reluctant about listing their properties as a result of a market correction that removed almost 10% from Melbourne home values since the peak in November 2017. This changing marketplace is fueling the resurgence by giving buyers less to choose from.
According to experts, the downturn may be over, and May’s federal election made a significant change to the current status of real-estate.
The Election Changed the Game
A lot of homeowners and buyers were avoiding the real estate market before the election, and if Labor had gotten in, there’s a chance that we’d still be in a down market. However, the federal election prompted a serious of important changes, including a cut to the cash rate to a record low of 1%. Additionally, the Prudential Regulation Authority in Australia removed the interest-only lending caps in the marketplace and create a 7% serviceability buffer for loans.
This significant change has made a big difference to Melbourne, adjusting the market from a buyer’s game to a seller’s game. The closure of the banking royal commission was also a key factor too. Buyers are also back, but we haven’t seen much of an increase in listings yet, which is putting the pressure on pricing in certain locations.
The strong Spring season is driven by buyers keen to get into the market, and vendors who have been reluctant to get started. Figures showed that Melbourne had fewer auctions in the September quarter, but achieved more sales. What’s more, experts expect around 7,000 homes to go under the auction hammer throughout Spring, which is a massive reduction from last year. According to analysts, the clearance rate is strong for the market at this time. Previously, Melbourne’s sale rate had remained at just over 50%, it’s now above 70%, and has stayed that way since July.
Upgrading your Home? The Time to Act is Now!
If you’re looking for a chance to upgrade into a bigger and better property for a discounted price, it’s time to act fast. The market is beginning to change, and that’s big news for savvy buyers who have been taking advantage of the recent downturn to trade up on higher-priced properties.
Now that the interest rate has been cut, and bank lending rules are changing, allowing purchases to borrow more, the market is changing. Over the past 6 months, buyers have seen good value in larger properties, although not everyone was ready to act immediately, particularly in an environment without a lot of options. However, you may not have the same opportunity to upgrade for much longer if you don’t take advantage now. The evidence is clear that the market is once again switching to become a seller’s environment, so buyers will need to jump quickly if they want a bigger house.