The numbers are low and we're ready to go!
The market will open up soon and when it does you can expect it to burst out of the blocks to make up for lost time, which will see some early upward pressure on prices. Initially there will be a lag in the time it takes to get a property to the market as vendors and agents prepare their property for sale and get all the photos and marketing material together. While this is happening there are a significant number of buyers that are ready to pounce to purchase something that meets their needs. Many of these are home buyers that have sold and need to buy a new home but there are also a number of investors that have kept their jobs and are ready to start or add to their portfolio. This may not see large increases across the board, but where the majority of these buyers are congregated it certainly will. Based on our enquiry level this will be the case in the lower price points and in areas that have strong demand, particularly within the 15 km radius to the CBD and within close proximity to transport and cafes/shops. You may also see some pressure in blue chip areas at a higher price point which have been devoid of any supply over the last six months
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Care should be taken however as apartments are likely to be under pressure particularly in larger developments that have little to no scarcity value. There will also be pressure on rentals as a large chunk of the market, particularly within the CBD has traditionally been rented by overseas students which is currently at a very low point due to COVID 19. So, investors need to be wary on where and what they are buying.
For those that are sitting on the sidelines though waiting for a dramatic drop in prices are likely to be disappointed. The high level of stimulus that has been pumped into the economy is likely to continue in the Federal budget with tax cuts widely expected to be bought forward. In a large number of cases this will increase the level of disposable income that needs to find a home. Combined with the low interest rates, anyone that qualifies for a loan will be in a great position to set themselves up with a high performing investment with historically low outgoings. It has never been more important for people to consider how to increase their passive income and to reduce their reliance on their paid job which has never looked so fragile.
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There is also an expectation that both Federal and State governments will bring forward some significant infrastructure projects which will also stimulate the economy and the property market in many areas.
Indeed this sort of expenditure is unprecedented on a global scale which is helping these economies bounce back in record timeframes. This is also driving some fairly significant property increases as the shackles are lifted and people can get out and spend their money. We are already seeing this in NSW which is showing better than expected employment figures and increasing property prices.
So, we remain fairly bullish on the property market in Victoria. There may be an influx of supply early next year which could put a damper on the market, but we do not expect that to last very long and the market is likely to continue on a growth trajectory.
This month we look at some interesting statistics for the property market, the state of the property management market and provide a tip for the summer months if you own a pool and what is required to meet the new regulations.
Enjoy Spring!
Leigh McConnon
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Interesting Real Estate statistics
This is an except from a recently published article in Property Me, written by Silvia Liu on 26th August 2020. It contained some important, insightful and interesting real estate statistics — the type that allow you to gain a deeper understanding of the market, and help you to get ahead of your competitors in the industry. We hope you find them as interesting as we did.
Australian property market statistics
- The Australian property market is made up of approximately 9.9 million private dwellings, with an average of 2.6 residents and 1.8 motor vehicles per dwelling (ABS, 2016)
- The average number of bedrooms per dwelling is 3.2 (ABS, 2019)
- As of mid-2019, the fastest growing capital cities by annual population increase were Melbourne at 2.3% and Brisbane at 2.1%, while Darwin at -0.8% was the only capital to have a net reduction (ABS, 2020)
- Australian homes are getting smaller, hitting a 22 year low of 186m² in 2018, from a record high of almost 220m² in 2009, although they are still the second-largest in the world, after the US (Commsec, 2018)
- More buyers are choosing to purchase a unit over a detached house due to cost and location. In 1993, only 22.7% of all dwelling sales nationally were for units. In 2018, units comprised 29.6% of all sales and in some cities, they accounted for more than 40% of all sales (Aussie, 2018)
- In 2016, there were 1,214,372 occupied apartments and 6,343,419 occupied separate houses. Compared to 1991 figures, the number of occupied apartments (including flats and units, excluding townhouses) increased by 78% (ABS, 2017)
- 47% of the 1,214,372 occupied apartments are located in New South Wales, while 23% are located in Victoria and 17% in Queensland (ABS, 2017)
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As of mid-2019, the fastest growing capital cities by annual population increase were Melbourne at 2.3% and Brisbane at 2.1%
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Australian home ownership and renter statistics
- 67% of Australian homes are owner-occupied, while 32% are rented (AIHW, 2020)
- In 2017-18, 32% of Australian households rented their home from all landlord types, 27% from a private landlord and 3% from a state or territory housing authority (ABS, 2019)
- Compared to 1997-98, there has been a decline in households that own their home outright (30%, down from 40%) and an increase in households that have a mortgage (37%, up from 31%) (ABS, 2019)
- The average loan size for owner occupiers increased from $81,500 in 1993 to $388,100 in 2018 (Aussie, 2018)
- The overall rate of home ownership is projected to decline to approximately 63% by 2040 (AFR, 2020)
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67% of Australian homes are owner-occupied, while 32% are rented
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Australian property investment statistics
- 15.7% of Australian taxpayers own an investment property (PropertyMe, 2020)
- Around 70% of property investors own one investment property, with an average of 1.28 properties per investor (CoreLogic, 2016)
- 19% of investors own two properties, and under 10% own three or more (ATO, 2017)
- 47% of property investors are now female, up 20% on last decade (PropertyMe, 2020)
- In the 25 years between 1993 and 2018, Australia’s average house price rose 412%, far exceeding inflation (86%) over the same period. Melbourne had the largest increase in property values within a capital city, followed by Sydney and Perth (Aussie, 2018)
- Across Australia, Victoria has the highest proportion of investment owned dwellings by state at 30.5%. This is followed by Queensland at 28.5% and New South Wales at 26.3% (CoreLogic, 2016)
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Victoria has the highest proportion of investment owned dwellings by state at 30.5%
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Managing director and Buyer's Agent Leigh McConnon was recently interviewed by Mike Mortlock from MCG Quantity Surveyors for the Geared for Growth podcast.
They discussed all things property, including a look into Leigh's career and his shift to real estate, and the key fundamentals to consider when buying and investing in property.
Listen to the Podcast episode on Spotify, iTunes or click here!
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Property Management Update
Lockdown 2, stage 4 restrictions are the most challenging our team have experienced. Whilst we have managed to keep our entire portfolio seamless throughout this unprecedented time, the restrictions on showing potential tenants through our vacant homes has presented its own challenges.
Our team have been able to hold “open homes” via zoom whilst attending the property to carry out final inspections. Whilst this is a time-consuming task, it has delivered some great results for our landlords.
Again, we continue to assist and manage any requests from our valued clients who are experiencing financial stress, leasing enquiries and maintenance issues.
Our team are working remotely leaving no stone unturned, it is “business as usual” for us, having put into practice alternative ways to manage the challenging changes we are experiencing. In saying this, our team are looking so forward to restrictions easing and getting back to the office.
We pride ourselves on creating an unsurpassed Property Management experience for all clients. If Covid-19 has left you questioning what it is that your Property Manager does, please feel free to contact Lily on 0437 232 529 or Rachel on 0477 663 325 for a confidential chat. We welcome your enquiry.
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Our Vendor Advocacy Services
Did you know we offer Vendor Advocacy?
A service within our broad range of offerings is Vendor Advocacy. We can assist clients in taking the time, stress and pressure out of selling a home or investment property, delivering focused experience and expertise in all aspects of a property sales transaction.
We are able to provide an independent valuation of your property. Our Advocates are experienced advisers who will guide you objectively through the sales process.
Our role as a Vendor Advocate is to act for the seller, to appoint a suitably qualified real estate agent. This ensures at all times that selling agents do what they say they will do, charge a fair and reasonable fee for their services, act impartially when introducing buyers and market and promote your property professionally and effectively.
Our fee is deducted from the sales commission, so it won’t cost you anymore to engage our service to assist you to sell your property.
Let us help you sell your property. Contact one of our experienced Buyer’s Advocates on (03) 9818 4499, for an obligation free discussion.
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Tip of the month:
Pool barrier compliance
Did you know:
- All pools need to be registered with the local council by Nov 1st 2020.
- The registration process is a two stage process.
- All pools need to be inspected and certified as compliant on a staggered timeline, depending on when the pool was built, every four years.
- The pool will need to be inspected under one of 4 standards.
- The process is tricky and sometimes complicated when there have been additions or changes to the pool barrier over the years
If you need any advice or inspections, contact Michael Silverstein from Melbourne Pool Fence Safety Inspections on 0478 191 097, or email him by clicking here.
(Licensed Pool inspector IN-PS 65903, Registered Builder DB-U 28680)
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Our Office
To support the government’s efforts to flatten the COVID-19 curve, Buyer's Advocate is currently closed.
All of our staff are operating from home and are always available to take your call, or Zoom if you prefer, so if you need to contact us at all just call the number below. We are here to help!
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