In preparing this month’s Market Update, I wanted to start by providing a timely reminder of an old saying that seems particularly relevant right now… “the numbers don’t lie”.
Having seen the Reserve Bank increase official interest rates for the twelfth time in just over a year, many Victorians have made the assumption that the property market should be in decline right now. Yet, the data from trusted market analysts continues to indicate the opposite.
The latest figures from Corelogic show that our national Home Value Index recorded its third monthly rise in May. In fact, the rise of 1.2 per cent last month was the strongest monthly growth recorded since November 2021.
These figures confirm what our team has been seeing ‘on the ground’ in recent months. As we mentioned in last month’s Update, the continuation of the tight market conditions where new listings remain scarce has seen buyers continuing to compete for the best of the limited selection, meaning many sellers are achieving results that have exceeded expectations in some cases.
The question on everyone’s minds is can we guarantee that this market imbalance will continue for the rest of the year? The simple answer is “no”.
There is no question that we will see an increase in properties hitting the market as we head into Spring, and we expect that this will become more pronounced as an increasing number of homeowners are forced to adjust to substantial increases in their home loan repayments as they move from their fixed rate mortgages to much higher variable rates.
Our team is already noticing an increase in enquiries from vendors who are dealing with these changes and reassessing their property plans, and we expect these conversations to become more common as the year moves on.
As you may have seen in this week’s news coverage, the Bureau of Statistics has confirmed that household discretionary spending has been cut in response to rising mortgage costs and savings levels have dropped. So the balance between supply and demand is likely to change in the latter half of 2023.
The good news for anyone weighing up making a move is that as I mentioned earlier, conditions for sellers remain positive right now and are likely to remain so for the next month or two. Thus, my advice to anyone considering selling in 2023 is to do it now while there is still a continuing lack of competition from other sellers and a solid level of underlying demand from buyers.
Of course, you should feel free to give our team at Ian Reid Buyer and Vendor Advocates a call to discuss your plans at any time. We’re always ready to assist you to move forward with confidence and certainty, so don’t hesitate to give us a call this week on 9430 0000.