The market is on the move, and it is heading up.
However, don’t panic just yet. The “quietly gaining confidence” I referred to in last quarter’s report is continuing, so we are a long way away from the FOMO days of 2020 and 2021.
As is often the case, Melbourne’s upturn is being led by premium inner-city suburbs. On this occasion by the inner east the strongest, the inner north and west a step behind, with inner bayside being the relative laggard.
Lack of supply seems to be the primary driver and the Melbourne inner city real estate agents I’m speaking to don’t think that supply will increase much in Q3, noting that prospective sellers who want, rather than need to sell, aren’t highly motivated to sell when it is so challenging to find a replacement property.
The circa $1.5m-$3m first family home buyer market is particularly strong.
Buyers in his space with finance pre-approvals in place feel they need to move quickly and aggressively when they find a property. They are conscious that potential interest rate rises can have a negative impact on their buying power if they need to seek an updated pre-approval – even one or two 0.25% interest rises could see buyers having to downgrade size or location due to what they can borrow.
Even as prices were falling, affordability was decreasing as a result of rising interest rates.
It doesn’t seem to be getting any easier for inner city Melbourne first house buyers!
The big picture and long-term outlook for owners of quality inner Melbourne residential properties look promising:
- Migration – more than 970,000 migrants are forecast to arrive in Australia over the next three years, all of whom will need somewhere to live.
- Supply/Demand – best to just quote CBA’s economics boffin, Gareth Aird – “The imbalance between the underlying demand for housing and the projected supply of new dwellings means a chronic shortage of housing in Australia and that will have negative consequences for renters and those people wishing to purchase a home.”
- Rising rents – are seeing investors return to the market and encouraging people to buy rather than rent
- Mindset – Australians love living in & owning their own home & see property as a relatively safe & gainful investment option.
As a Melbourne Buyers Agent I am always interested in your thoughts so don’t hesitate to give me a call on 0457 513 124.
