By Philip Webb
As we creep closer to April, buyers are rushing to secure a property before Easter. The Easter holidays and Anzac Day fall at the start and end of April, meaning that the middle of the month is set to be a big period for auctions.
With COVID-19 conditions now improving and auctions running full steam ahead, the Melbourne property market is seeing some fantastic results due to pent-up demand. This demand has accumulated from two years of uncertainty in the market – in 2019, we were in the midst of the banking royal commission, and then in 2020, COVID-19 hit, leading to a lack of confidence in the market that suppressed activity.
But now, with restrictions eased, a lack of supply on the market and a variety of concessions and incentives available from the Victorian government, these conditions have produced the perfect storm for buyer demand.
In fact, PhilipWebb Real Estate has seen a 100 per cent clearance rate for the fourth week in a row, with properties averaging about 60 – 70k above reserve.
But whilst vendors are seeing fantastic results at auction, volume is still down around 20 per cent overall. Confidence is a key factor – vendors are afraid to put their property on the market due to lingering uncertainty around another potential lockdown, and job security remains a concern for vendors with the end of JobKeeper right around the corner. Subsequently, this supply deficit is likely to push through to until the End of Financial Year.
Concerns also remain around selling before buying – with this competitive market, vendors worry that whilst they may be left with a good sale, they may be unable to secure a home to move into, which feeds right back into this same supply issue.
Realistically, I predict that we will need to see another 10 per cent more properties come onto the market before supply and demand reach equilibrium. However, if conditions remain on this same trajectory, this target shouldn’t be too far off!