Property Market Has Bright Patches, But Overall Remains Subdued

For lower priced properties in the first home buyers’ price range, interest is reasonable with purchasers keeping their mortgages at affordable levels and where possible, using grants and assistance from Govt schemes to help out with the purchase. In the established suburban areas this will be of assistance to apartment sellers whose properties fall into this price category. Demand is also best for well-presented properties generally that do not require renovation; both houses and apartments, provided vendor price expectations are reasonable.

Broadly, it is safe to say that price growth for now is on hold. Agents now are happy to find just one good buyer on each listing. For property, the market may be best described overall as “flat”. The days of expecting multiple buyers on most or all listings are no longer with us. An agent does however only need one (good) buyer on each listing to sell 100% of their stock, which makes for a very good outcome! But in order to achieve that outcome, change is considerable to just how sales will be transacted. Herein lies the value of employing a buyers advocate with industry experience. Buyers advocates who have sales experience from past years and different market conditions know and understand agent behaviour and thinking – this is key to being a step ahead.

What does a “flat” market mean?

Firstly, it does not mean every sale will be difficult for an agent to achieve. (But it does mean more will be). Buyers need to appreciate that even in the quietest market, certain individual properties will broadly appeal and complacency on a buyer’s part thinking “the market is on my side so I’ll play it cool” with every property, could prove costly. “Flat” certainly does mean that sales are far more likely to occur prior to auction instead of automatically going through to auction date (this is contrary to the usual reasoning buyer’s have – they tend to anticipate the opposite is the case i.e. strong market = more sales prior. No). Agents will be alert looking for the “one buyer”. 

When auction success rates across Melbourne are hovering around the 60% figure – remembering this is taking all areas and all property types into consideration, it is saying that more work is generally required to find a buyer and thus sell a property. Whilst the numbers above are relating to properties scheduled for auction, the success rate translates directly into how buoyant the private sale market is as well. Keep in mind many more properties are sold by agents across Melbourne by private sale, not auction. In theory, for buyers it is therefore easier to buy in this quieter environment. But in practice, it is rarely easy 😊.      

Bruce Renowden
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