Rates up again on Cup Day, but sellers are doing well
Over October’s five weekends the Real Estate Institute of Victoria (REIV) recorded more than 3,507 auctions. 2,114 properties sold. 1,615 at auction, with 922 passed in. 495 properties were sold before auction & 4 properties were sold after auction. The clearance rate averaged 70%, just down on September’s 71%.
Quality properties sold well across October and demand was strong. The shortage of stock is keeping buyers keen, making it a good time to either upsize or downsize, in predictable conditions.
Reserve lifts rates 0.25%
The Reserve Bank maintained its drive against inflation by lifting the cash rate to 2.85% on November 1. Economists believe the rate will probably be up to 3.6% in the first quarter of 2023.
Rates are still historically low compared with the last 20 years and the majority of lenders report only low levels of borrower stress (Domain), indicating the majority of mortgage holders are managing with the rises. Underpinning this is the fact that unemployment is very low right now and the business environment remains strong.
Value suburbs still on the rise
Across October the property pendulum continued the general swing back from the market peak early this year. But surprisingly two thirds of Melbourne’s suburbs (numbering 279) still have rising prices, showing the trend towards affordability. Bonbeach, West Brunswick and Noble Park have had some of the strongest value growth over the last 12 months.
Melbourne’s most expensive suburbs continue easing in value, falling 4.3% over the September quarter (Domain). However just out of town, the big names in sea change – Portsea, Flinders and Sorrento have hardly been effected. Flinders takes the cake with values up 73% in the last 12 months and a new median of 4.2M which is 700,000 more than Portsea (3.5M). Flinders, with its bigger blocks and no summer crowds, has stolen Portsea’s crown.
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