Melbourne Property News Monthly Wrap – April 2023

Auction numbers and sales ramp up across March

Over April’s five weekends the Real Estate Institute of Victoria (REIV) recorded more than 2,849 auctions. 1,863 properties sold. 1,449 at auction, with 506 passed in. 411 properties were sold before auction & 3 properties were sold after auction. The clearance rate averaged 77.8%, up on March’s 75%.

Market momentum has been building again with growing demand added to by high immigration and the confidence brought by the pause in interest rate rises. However to maintain control of inflation, on May 2nd the RBA did do a surprise lift of 25 basis points, taking the rate from 3.6% to 3.85%.

Market bounces off bottom

Figures just released by the CoreLogic National Home Value Index reveals a turn to positive price growth with Melbourne house values up 0.1% over April and Sydney increasing by 1.3%. Melbourne’s Inner East has just actually posted a quarterly change of +5.9% (Domain Home Price Report). Just as the expensive ends of the market are always first hit by a downturn it also shows first signs of an upturn. It’s a good time to sell right now, before more sellers hit the market.

Expanding Home Guarantee Scheme brings more buyers

Thousands more Australians will be able to qualify for the Home Guarantee Scheme and join the ranks of first home buyers, in the Government’s latest move to ease the housing affordability crisis. Eligible first home buyers only need a deposit of 5% with the Government being guarantor for the rest.

Friends with benefits

People had to be ‘couples’ (i.e. married or de-facto) to qualify for the Scheme but now ‘couples’ can include friends, relatives, guardians, or ‘any two eligible individuals’.

The number of places available has been boosted from 10,000 up to 35,000. Price caps are to be lifted by as much as $150,000. The Melbourne cap goes up to $800,000. This is below the median house price of $890,000 and above the unit median of $590,000. It is supposed though, many people in the scheme will target units as their entry level.

Another addition is allowing people who owned a home once, but have not owned a home for 10 years to qualify for the scheme. This helps people affected by relationship breakdown or other financial crisis get their foot back in the market.

650,000 new immigrants need homes

The pressure on demand will only increase because Australia is hosting 650,000 new migrants over the next two years. With rental accommodation so tight and rents rising, more immigrants are likely to fast-track their home purchase decision simply because they can’t find suitable rental accommodation.

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