Market buffered against doom and gloom forecasts

Aug 2023Karen Millers

The property market has been as edgy as it has ever been in recent years, with COVID starting off a rollercoaster ride that hoodwinked many analysts.

Lockdowns followed by labour shortages, supply chain interruptions, and then interest rate rises amongst a number of building company collapses, were the trigger for some market commentators to forecast a melt down in the market.

Contrary to the plethora of poor property forecasters who predicted significant property price falls, market conditions continue to be solid in the face of the low supply of sales listings around the nation, according to the latest Property Investment Professionals of Australia (PIPA) National Market Update.

This report pulls together insights and analysis from seven market experts and PIPA members from the latest edition of the PIPA Adviser e-magazine’s national market update.

PIPA chair Nicola McDougall said the significant price falls simply did not materialise in many property markets, even with the most rapid increase in interest rates in a generation.

“Of course, part of the reason why prices have been strengthening is the significant number of overseas migrants – some half a million seemingly – who have landed on our shores within the past year or two, which is also causing rental markets to continue to struggle with a critical undersupply of stock.”

Ms McDougall said as well as healthy market conditions, it appeared that the rising interest rate cycle may have come to an end.

“The Reserve Bank of Australia took its foot off the throttle in early July and held the cash rate steady at 4.1 per cent, which provided some confidence to property buyers around the nation.

“The June quarter inflation reading also came in well under market expectations at six per cent with it highly possible we are at, or near, the peak of the cash rate.”

Surf Coast real estate agent Michael Ferris from Ferris Gold said the 3228 area encompassing Torquay and Jan Juc historically experienced a slowdown during the cooler months but it’s important to note that well-positioned, and appropriately priced homes, continue to experience strong demand.

“The micro-markets within these suburbs, such as the Top End market, are thriving and breaking records, showcasing the sustained interest from buyers of turnkey properties in these sought-after locations.

“I also have some positive news for tenants as rental properties in the area have seen a significant increase in availability levels, rising by 21.77 per cent in the past 60 days.

“This surge in availability gives tenants a more comprehensive range of options and more time to choose their ideal coastal abode carefully.”

However, Mr Ferris said it was crucial to acknowledge the challenges investors have faced recently.

“The Victorian government’s Residential Tenancies Amendment Bill 2018, consisting of more than 130 reforms, and the recent amendments to land tax and windfall tax have considerably impacted investors and landowners.

“These policy changes, along with the radical tax reforms, appear to discourage investors and favour tenants.

“Despite these challenges, as an agent actively engaged in the local market, I remain optimistic about our coastal region’s opportunities and growth potential.

“While it’s essential to address the concerns raised by industry professionals, we should also highlight the unique strengths and opportunities within our local markets.”

Originally Published: Dean Webster | Bellarine Times | 11 August 2023

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