March Budget creates thousands more buyers
In March the Real Estate Institute of Victoria (REIV) recorded more than 3,760 auctions. 2,597 properties sold. 1,887 at auction, with 756 passed in. 704 properties were sold before auction & 6 properties were sold after auction.. The clearance rate was 78.25%, just down on February’s 79.25%.
March was solid but what lies ahead?
March was a great time to sell a property with high clearance rates and strong demand. It’s very promising looking forward too with values across much of Melbourne tipped by analysts to grow across the year by about 6%. Some headwinds are expected later in the year with a rise in interest rates.
More days on the market
More stock availability right now means homes are taking a bit longer to sell. You would expect to take 4 to 5 weeks to find a buyer right now. Some vendors holding out for higher prices adds to longer sale times also.
Bigger pool of home buyers
Home buyers in Melbourne will increase with the Government extending first-home buyer schemes in this week’s budget. The expanded program provides 35,000 places for new or existing homes under the ‘First Home Guarantee Scheme’. It lets people put down a 5% deposit without being slugged with lenders mortgage insurance, costing tens of thousands of dollars.
5000 more places will also be offered for single parents to buy a home – with just a 2% deposit! The new scheme also encourages people to build homes in regional areas with 10,000 places available from October this year. Income caps apply to all three schemes. $125,000 for singles and $200,000 for couples.
Investors attracted by rising rents
The impact of the pandemic caused rents to fall, but now they’re rising again, which is attractive for investors. During the pandemic lots of investors sold out, grabbing the available gains after strong home price growth. But investors are pouring back into the market and their share of housing lending is now at its highest level since the start of the pandemic. Rising rental returns tempt investors with the added promise of good yields as well as value growth.
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