It was nice to see the new financial year kicking off on a positive note, with the Reserve Bank deciding against increasing official interest rates this month. This news would have come as a relief to many Victorian homeowners; however most analysts are still forecasting one or two more rises later this year before we start to see falls in home loan rates in 2024.
The past month has seen a continuation of the market conditions we have been reporting for most of 2023. Interest rates have made some buyers more cautious, but the ongoing shortage of new properties for sale, (with current stock levels lower than those experienced during the Covid lockdowns), has meant that buyers are being forced to compete strongly for the limited supply of suitable properties.
This has been particularly noticeable on better quality listings, with some exceptional sales results being achieved in the face of determined buyer interest. The rarity of what we could classify as “A-quality listings” has meant that fierce competition has produced some prices that exceeded all expectations.
One trend we have seen in recent months which is further impacting the overall quality of properties for sale is the increasing number of investors who have reacted to the recent changes in the last State Budget by deciding to sell their rental properties. Recent data from Corelogic indicated that over 32% of new sale listings in May in Melbourne were former rental properties. This compares with the average over the past decade of 27%.
This situation provides some important messages for our clients. For owner occupiers who are planning on selling in 2023, there is a strong argument for selling now while the supply/demand equation is stacked so heavily in your favour. This is very relevant given that you are likely to see far more competition from other sellers in Spring, particularly if further interest rate rises put additional pressure on some vendors to sell.
If, however, you are a landlord who is considering selling, the value of the right advice cannot be overstated. The increased competition from other landlords trying to sell their rental properties means that taking the right steps to make your own property stand out, choosing the right agent to handle your sale and the right marketing strategy to achieve that result has never been more important.
Of course, if you are one of the many frustrated buyers trying to make sense of the current market, the right advice and strategy can make a huge difference to your result and your stress levels, as our team has been proving on a weekly basis recently.
So, no matter what your property goals look like in 2023, I would urge you to get in touch with our team at Ian Reid Buyer and Vendor Advocates as soon as possible. We’re here to help, so feel free to make an obligation-free call this week on 9430 0000.