The latest data released by the REIV for the March 2020 Quarter, reveals the strong performance of the Victorian property market in the lead up to the coronavirus pandemic. Like most of the economy, the real estate sector saw a significant change in conditions from the middle of March, following the Government’s announcement of a series of restrictions on social gatherings.

The Metropolitan Melbourne region saw median house prices reach a record high of $893,000, up 3.7% since December 2019 and up 2.3% since March 2019. Unit and apartment prices recorded a median price of $641,000, up 0.6% since December 2019 and up 4.6% since March 2019.

Regional Victoria saw median house prices reach $419,000, down -0.5% since December 2019 and up 2.5% since March 2019. Unit and apartment prices recorded a median price of $297,500, down -3.3% since December 2019 and no change at 0% since March 2019.

The Inner Melbourne region saw median house prices reach $1,485,000, down -1.9% since December 2019 and down -1% since March 2019. Unit and apartment prices recorded a median price of $635,500, up 0.3% since December 2019 and up 4.2% since March 2019.

The Middle Melbourne region saw median house prices reach $1,024,500, down -0.8% since December 2019 and up 3.1% since March 2019. Unit and apartment prices recorded a median price of $724,500, up 1.9% since December 2019 and up 6.6% since March 2019.

The Outer Melbourne region saw median house prices reach $695,500, up 2.7% since December 2019 and up 0.3% since March 2019. Unit and apartment prices recorded a median price of $550,000, up 1.3% since December 2019 and up 2.1% since March 2019.

Auctions saw median house prices reach $1,012,500 which has no change at 0% since December 2019 and up 4.3% since March 2019. Unit and apartment prices recorded a median price of $713,500, up 0.2% since December 2019 and up 6.1% since March 2019.

Private Sales saw median house prices reach $753,000 which was up 2.1% since December 2019 and down -1.5% since March 2019. Unit and apartment prices recorded a median price of $573,000, down -0.5% since December 2019 and up 3.7% since March 2019.

Is now a good time to buy a property?

With the flattening of our COVID-19 infection curve, there is the possibility that we might see an early exit from containment after a one-to-two-month lockdown. This coincided with the JobKeeper incentive and other business stimulus packages in an assertive effort from our Government to get workers back into their jobs and help minimise the number of mortgage arrears and losses.

As soon as we see improving economic conditions, we believe there will be a rise in sentiment and “pent-up demand” from buyers and sellers who had put their property goals on hold during the pandemic. This will provide a stimulus to the housing sector which could result in a strong recovery in the later part of the year, making now an opportune time to buy a property.

The team at Beckett are continuously monitoring the latest developments so that we are best informed to help our clients make the best decisions to ensure both personal and financial health. We are still trading and assisting our clients under the Government’s new health guidelines and we welcome any future enquiries.

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Over the past month, both State and Federal Governments have introduced new measures to address the ongoing threat posed by the Coronavirus (COVID-19) outbreak.
In an effort to curb the spread of the virus, social distancing measures have significantly altered business practices across all sectors of the economy. Among the Government led directives, are bans on open real estate auctions and open home inspections. These have now been replaced by online auctions and private property inspections.

Social distancing will also likely delay property transactions as policies may intensify. It is hard to forecast the exact impact this is going to have, but it will certainly adjust how the real estate industry operates. Although it is difficult to be definitive in these rapidly changing conditions, we currently foresee a downturn in the property sector to be relatively short lived.

For the second time in March 2020, the Reserve bank of Australia cut the official cash rate to a new record low of 0.25 per cent in an emergency move to support the economy facing challenges due to the Coronavirus. Government and RBA measures to help struggling businesses and households through the Coronavirus shutdown should help in preventing a really big rise in unemployment. Some economists have stipulated that if there was a rise in unemployment to around 7.5%, it would likely drive a 5% dip in property prices. However, once COVID-19 is under control, a market recovery is anticipated as the Australian economy bounces back and consumer confidence rises.

What do I need to know if I’m looking to buy a home?
For those that have the capacity to buy in the current market, money is cheap and there could be some great opportunities over the next few months. In this environment, buyers who have very secure jobs are actually in an improved position because the overall market is weaker. There will be buyers who are simply unable to buy now due to reduced incomes and job uncertainty. Then there are others who are adopting the wait-and-see approach.

What do I need to know if I’m a property investor?
Property is deemed a safer investment option compared with the share market and those who take a long-term perspective will always outsmart short term reactive thinkers. It has never been cheaper for investors to obtain finance and if prices come down, rental yields will increase, and investors will be in a far greater position to capitalise. A major point to factor is that it could take longer to find a tenant, or a rent reduction may be required during these unprecedented times.

What is ahead
Unfortunately, no one has the crystal ball to accurately predict the future. We can’t be sure how the Coronavirus health crisis will pan out globally. We also can’t be exactly sure how it will affect the Australian economy or our property market until we see an end to this crisis. There will be some business casualties along the way, but eventually, things will improve and we will get through this.

Once COVID-19 is under control, the housing market is likely to bounce back with a combination of record-low mortgage rates and the likelihood that they will remain at these levels for quite some time. In addition to this, a slowdown in property transactions in the coming months combined with continuing population growth will likely create pent-up demand for housing. This pressure on supply and demand will once again drive high property prices.

The team at Beckett are continuously monitoring the latest developments so that we are best informed to help our clients make the best decisions to ensure both personal and financial health. We are still trading and assisting our clients under the Government’s new health guidelines and we welcome any future enquiries.

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Melbourne’s property market is currently experiencing the quickest price recovery on record, which is disheartening for many buyers who hoped that prices would stay level after the recent correction in 2018 and the first half of 2019.

This week, the REIV released data for the September Quarter stating that Melbourne’s median house price jumped 4.5% in just three months to $830,000. The property shortage is really starting to push prices up and forced the largest growth in Melbourne home values in two years.

There has also been a strong resilience across the metropolitan units and apartments sector with prices increasing by 3.9%, despite higher supply levels. This most likely comes down to affordability constraints in the market as well as more first home buyers supporting demand, thanks to first home owners stamp duty incentives.

The top end homes of Melbourne previously recorded the largest decline over the past twelve months, but now these suburbs are leading the charge for the most rapid recovery.

What’s driving the house price increase?

The strong rebound is attributed to a variety of factors including:

• The Liberal party winning the Federal Election.
• Three interest rate cuts and record low mortgage rates.
• APRA loosening credit rules.
• Higher levels of investor participation.
• Strong population growth.
• Weak Australian Dollar which is incentivising foreign buyers again.

Another major driver of this sudden price surge is the shortage of real estate stock which is approximately 40% lower than this time last year. Home buyers have suddenly changed their strategy when either up-sizing or down-sizing their homes.

The switch from a “Seller-Buyer” market

During 2018 and the first half of 2019, people were not confident they would achieve their desired price when selling their home and they felt more comfortable selling first as they wold know exactly what they had in the bank before they bought again. This forced the market to experience many ‘seller-buyers’ and contributed to very healthy stock levels. It made sense to people – in a declining market, sell at today’s price and buy at tomorrow’s price.

The switch to a “Buyer-Seller” market

Now that the market has turned and confidence is sky high again, people are very confident they will achieve their desired sale price for their home. However, they are now concerned they won’t be able to secure their new home or get priced out of the market. This has led to the ‘buyer-seller’ strategy which is putting more pressure on property stock levels. People aren’t listing their homes for sale until they buy first, which again makes sense in a rising market – buy at today’s price, sell at tomorrow’s price.

With positive media, easier lending circumstances, high auction clearance rates, price growth and restored buyer confidence, some property commentators are forecasting double digit capital growth for the year ahead.

The fear of missing out and then paying more is now the current theme in the marketplace. This sentiment was also experienced during the property boom from 2013 to 2017 when prices were soaring.

Speak to the experts in Property

If you are a first home buyer, upsizing your property or downsizing for lifestyle, a property investor or developer, the correct property selection is now more important now than ever.

Beckett Property are fully licensed Buyer Advocates and highly acclaimed Property Advisors who specialise in property acquisition services for home buyers, investors and developers across Melbourne. We help our clients grow, protect and pass on their wealth through a wide range of services.

If you are looking for assistance to source and acquire your next home or investment property in this market, please contact one of our experts today.

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So what is a Buyers Agent?

A Buyers Agent is an agent that represents the buyer in their property search. At Beckett Property we work with 3 types of buyers which is a person looking for a home, a property investor or a property developer. The Buyers Advocate helps the buyer to conduct the property search, evaluation and negotiation to purchase a property. Furthermore, they take the stress and emotion out of buying a property as it is their business. They are knowledgeable in the buying process and can help to quickly ascertain what a property’s true value is. Finally, a Buyers Agent has negotiation experience to secure the best price for they buyer.

How does a Buyers Agent help a Property Buyer?

A Buyers Agent guides their clients in every step of the property-buying process. This includes:

• Understanding the buyer’s requirements
• Conducting the property search and identifying the best properties and location for their budget.
• Helping buyers to assess the quality and risk profile of the property.
• Manage the acquisition process which includes bidding at the auction or negotiating off market deals

9 reasons why property buyers should use a Buyers Agent

1) Experience and knowledge

Buyers Agents buy houses as a profession, while people outside of the industry may only buy houses a few times in their life. They can quickly establish what a property’s worth and how the market is trending. This will help buyers to understand whether a property is right for them and is likely to achieve capital growth.

2) Speed into Property Market

With knowledge comes efficiency and at Beckett Property, our average search time before we buy a property is 44 days. This process for an un-experienced buyer can take months and still not yield results. Recently we met with a client who was searching for 11 months and could not secure anything. Once Beckett started working with them, we found them a property they loved within 35 days. This is mainly down to having an established process to search and select the right places.

3) Helping Property Buyers secure the property at the best price

Buyers Agents are experienced negotiators. They know what questions to ask, how to bid at the auction and what the realistic value of the property is. They negotiate with confidence having done it so many times before and without any emotional attachment to the property which means it’s easier for them to walk away if the price is not right.

4)  Access to Off-Market properties

Many properties are sold off-market for a number of reasons such as the vendor wanting a swift sale. A good Buyers Agent will have relationships with a range of real estate agents meaning they are often the first to be informed about the latest off market properties that become available.

There is usually less competition for an off-market property and if the seller does want a quick sale, then you have more negotiation power. A Buyers Agent will know how to approach them to ensure that you are the best position to negotiate.

5)  Not emotionally connected with the purchase

As mentioned earlier, many property buyers can blow their budget as they become emotionally attached to the property. Since the Buyers Agent does not have that same attachment, they can help their clients make a better, more informed decision. This includes sticking to a budget, being confident at the auction and knowing when to back down if the competition is hot.

6) Save time and build confidence

Many of us are busy with our day to day lives so finding the time to research and purchase a property can be difficult. Additionally, this can become stressful if your searches do not lead to anything or you become nervous and uncertain at times throughout the process. Working with a Buyers Agent will take the guesswork out of buying while saving time and stress on the property buying process. In addition, they will help to ensure buyers are confident with their purchase.

7) Licensed in Real Estate

Having experience in buying properties is a requirement for any property buyer looking to work with a Buyers Agent. In addition, we recommend that people work with Agents that are fully licensed. Having a real estate license is not a requirement by law and many do operate without one. Those that do have the right qualifications will have knowledge of the regulatory requirements and legislation to ensure the buyer is fully protected when purchasing a property.

8). Their interests are aligned with the buyer

A Real Estate Agent works for the seller so their objective is to sell the property for the highest possible price. A Buyers Agent works for the buyer so their interests are aligned with the buyer’s needs and to purchase the right property at the right price.

9). Convenient for interstate and foreign buyers

To buy a property, you need to be in the market and viewing the properties before bidding. If you are not in market, working with a Buyers Agent can help to be your eyes and ears on the ground. They can shortlist a selection of properties so that you can fly in at one time to go through them all in one day.

Considering buying property in Melbourne?

If you are considering buying property in Melbourne, consider – Beckett Property Buyers Advocates; to provide you with the sound advice you need to make confident decisions. For a free consultation provide your details below and one of our expert advisors will be in touch.

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