February makes a bumpy start for 2019.
Over February’s 4 weekends more than 1,873 auctions were reported the Real Estate Institute of Victoria (REIV). Approximately 799 sales were recorded. 800 properties were passed in, 400 of those were on a vendor bid. The clearance rate averaged 56.5%, up on December’s 49%. Sharply down on February 2018’s 71.5%.
Conditions remained inconsistent across February. First home buyers and owner-occupiers are active, but fewer investors are willing to engage the market.
But there certainly are baby-boom parents out there ‘investing’ in entry level properties, in tandem with their adult children, in order to help get them into the market. Assisted by stamp duty savings and first-home buyer incentives. Agents are reporting many parent/offspring ‘teams’ at inner urban auctions in February.
With the correction in full swing and prices drifting back towards 2017 levels, buyers are keen and looking for sellers who are willing to meet the current market. Mortgage finance is tighter now but record population growth is keeping demand up, with property market forecaster BIS Oxford Economics still describing the 2019 market as ‘under supplied’.
Parts of the top end of the market are still very strong with North Balwyn notching up a new record in February with 12 Agnes Ave. selling in excess of 7 million. According to the REIV, Elwood is on a roll with the median house price increasing 19.6 per cent from $1.73 million to $2.07 million, in the final quarter of 2018.
The dip in home values has left some Councils facing severe criticism over Rates bills that were calculated at the top of the market and now far exceed the current worth of homes. For example home values in parts of St Kilda have dropped by up to 30% (realestate.com). But residents are now faced with rate payments Port Phillip City Council set in December 2017, based on maximum home values at the peak of the overheated market!
Also high on the list of falling home values is Toorak which has dropped by 31.6% and Clayton, down 23.1%.
Looking forward, St Kilda, Toorak and Clayton are now being described as having some of the best potential for value increases over the next five years, as they bounce back.
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