Since the start of this year, it’s clear there has been more activity from educated buyers and investors who perhaps have recognised that waiting it out on the sidelines is not going improve their portfolios anytime soon, according to the latest PIPA National Market Update.

PIPA Chair Nicola McDougall said property prices appear to be stabilising, partly due to the low volume of stock for sale. In fact, according to CoreLogic, the return to a more positive trend in housing values has occurred alongside a persistently lower than normal flow of new listings coming on the market, she said.

“At the time of writing, it appeared that the Reserve Bank might have hit pause in April on their successive cash rate increases,” Ms McDougall said.

“The 10 consecutive rises have added an eye watering 3.5 percentage points to the cash rate, which has pushed interest rates into five to six per cent range, a level many borrowers may never have experienced.

“With inflation also appearing to have peaked, there are certainly plenty of signs that we are heading for more positive property conditions in the months ahead.” For the State of Victoria, Cate Bakos, Buyers’ Agent and QPIA said “The Melbourne market can’t really be described as underperforming currently. “The recent monthly data supports what we’re all feeling at the coal face, a two speed market with heightened competition on quality properties and languishing listings for compromised listings.

“February’s overall capital growth movement of -0.4 per cent certainly signals a slowing of price falls, easily attributable to low listing numbers. “Buyers remain disinterested in renovation and or development projects and today’s buyers are applying high scrutiny to each listing in the quest to buy well, however, it’s becoming abundantly clear to these buyers that a low level of listings in the renovated house segment is underpinning the market firmly and contributing to price increases.

“Many buyers are still sitting it out, waiting for a ringing bell to suggest the market has bottomed, yet, others are fighting against their diminishing borrowing capacity as rate increases continue to bite.

“Melbourne’s overall annual rental growth figure of 10.1 per cent is in line with national rental growth, however, Melbourne’s unit market has dramatically uplifted.

“This is in sharp contrast to the huge rental price falls exhibited during lockdown as many tenants left our city and international students were on pause.

“As bosses request their employees return to either full time or hybrid office work, our demand is skyrocketing for units in Melbourne. “The recent influx of Chinese students ordered to return to in person study by the Chinese government is exacerbating the already challenging conditions that renters are facing.

“Our regions are performing reasonably in step with our capital city in terms of price declines, however the regions have maintained strong net gains from the pandemic rush experienced.

“While work from home, even in a hybrid capacity, local agents are reporting that those who moved to the regions are still content to stay.

“Agents are reporting that appraisal activity is high, yet listing decisions are slow. Vendors are anxious to sell when market commentary in the media is gloomy.

“It will be interesting to see what a change in sentiment does for listing activity, whether it be instigated by positive media commentary or a pause in interest rate increases. Time will tell, but while listing numbers are low in our autumn selling season, we can anticipate quality, renovated houses will continue to exhibit capital growth.”

Originally Published: Alexandra Eildon | Marysville Standard Newspaper | 3 May 2023