 February's demand
Every year in Melbourne we experience a peak in February. This trend is to be expected, because January is traditionally a slow month for listings while agents enjoy their annual break. Pent-up buyer demand combined with reduced listing activity creates an even stronger imbalance for our current Seller's market.
Yet even with the majority of auction starts scheduled for this coming weekend, there aren't enough properties for all of the buyers.
So what does this mean for the start of 2016 in Melbourne?
Over January we've seen very limited auction activity; most of which has been in the coastal holiday areas such as the Mornington Peninsula and Surf Coast regions. Our capital city agents have enjoyed a break from auction campaigns, and buyers have been at the mercy of friendly agents and their off-market alerts if they've wanted to canvas more than just the remaining online private sale properties. Being mindful of market conditions, availability of agents and the vendor's needs can make a positive difference for buyers during January and early February. A recent article we wrote was aimed at buyers who were searching throughout this unusual, non-auction period.
The first weekend of February usually marks a welcome change but the pent-up demand remains strong throughout this first-official-auction month and it's not usually until March that things start to ease a little for buyers. With Easter this year falling in the last weekend of March and Labour Day long weekend earlier in the month, agents only have two active weekends for auctions in what will be a busy autumn selling period. We believe that some particularly advantageous buying conditions will result in this period.
Many commentators and industry experts have suggested that we will see a slowdown in the rate of capital growth across our city in 2016, however the start to our year has certainly not hinted at any market slowdown. The last weekend of January saw some of the strongest buyer numbers through open homes. One agent reporting eighty groups attended a renovated villa unit in Brunswick, while another agent fielded sixty groups through a Clifton Hill period Victorian residence on Saturday alone. We do feel that 2015 was a stand-out year for house price growth and we don't expect 2016 to be quite as strong, but we do anticipate that the positive growth trajectory will continue right through the year. Amy's interview with Your Investment Property Magazine reinforced this opinion.
With housing sentiment still strong, the share-market showing volatility, SMSF property lending legislation being uncertain and property remaining a favourite Australian dinner party conversation, our year could continue to surprise us all.
Our main concern for investors this year relates to a division between the performance of houses and apartments. With tough lender scrutiny, a current oversupply of high rise apartments, and media attention focusing on investor hardship, we feel that caution needs to be applied to investment briefs in the sub-$450K spend range. In particular, when purchasing apartments, we are targeting only those blocks with minimal numbers of units and attractive Land to Asset Ratio's.
A popular theme for readers is often about mistakes to avoid. In January I penned an article for Which Investment Property about the Five Common Reasons Why Buyers Miss Out on a Property. Later my two-part series on Property Nightmares (and solutions) were each published. To read click here for Part 1 and Part 2.
Amy's Smart Property Investor article on What Not to Say to an Agent at an Open House was well received, as was the Building Wealth for Every Life Stage I was asked to participate in for API Magazine.
In our regular format, below we've featured three January purchases which we loved playing a part in.
Wishing our readers an exciting, prosperous and happy 2016....
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