Melbourne Property News Monthly Wrap – May 2021

Lockdown speedbump didn’t slow the market

In May the Real Estate Institute of Victoria (REIV) recorded more than 5,583 auctions. 3,863 properties sold, 2,860 at auction, with 773 passed in. 1,000 properties were sold before auction & 3 properties were sold after auction. The clearance rate averaged 83%.

May’s last weekend was set to be the year’s second busiest, showing how the market has run at full strength right up to winter’s doorstep. But the sudden lockdown announcement last Thursday had agents scrambling to move auctions online, or reschedule.

Buyers Zoomed in

A speedy end to the new lockdown looks unlikely. However, online bidders competed on May’s last weekend in large numbers, with very high clearance rates. 1000 buyers sped up proceedings by making successful pre-auction offers. Some busy agents reported a 100% success rate, for example one had all of their five properties in Sorrento and Blairgowrie sell online successfully. With zoom usage so familiar in the workplace, some people prefer zoom auctions, where they can bid from their own space.

Vic Government throws lifeline to CBD

With the CBD residential market in hot water new concessions have been announced to attract homebuyers back. There’s a waiver of stamp duty on new apartments with a less than $1 million price tag in the Melbourne City Council area, that have remained unsold for a year or more. It will also cut stamp duty by 50% on new homes that cost less than $1 million in the Melbourne City Council area that have spent less than 12 months on the market.

Vic Govt Stamp Duty hike

On the other hand the Victorian Government is grabbing more money from buyers by sharply increasing stamp duty on homes worth more than $2 million, raising the already high 5.5 % up to 6.5%, from July 1. That’s $20,000 more on a $2M home.

Leah Calnan, REIV President, says the tax hikes harm the economy and this Victorian Government campaign against investors will backfire. Because it’s investors who make rental properties available. Fewer rental properties out there adds upward pressure on rents, with a flow on across the board. And of course, some investors will now target cheaper properties to buy (under 2 million, to avoid the hike) adding to competition in more affordable categories and forcing prices up. Isn’t all this obvious?

Craig Knudsen
Principal Advisor
Vendor Marketing

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