New Population Figures Has Doomsayers Seeing Red

Melbourne Auction Results 26th of March 2017
82% Clearance Rate 1192 Reported Auctions	Sold at Auction:	974
	Passed in:	218
	Sold Before:	151
	Sold After:	2
	Postponed	19

Source:REIV

 

Melbourne Market Wrap March 26th, 2017

A clearance rate of 82 per cent was recorded this weekend compared to 79 per cent last weekend. There were 1192 auctions reported to the REIV, with 974 selling and 218 being passed in, 88 of those on a vendor bid. Prahran was the city’s top performer last week with 18 homes sold at auction while both Bundoora and Torquay recorded 100 per cent clearance rates from 13 auctions in each.  (REIV)

Melbourne Vacancy Rates Surprise

It was another huge weekend for auctions as more than 1500 went under the hammer in a bid to beat Easter school holidays which start Aporil fools day.

The Melbourne property market appears to have passed some big hurdles and held up on the back of some very strong clearance rates  ( over 80%). What I am seeing first hand though is a worrying trend for vendors, fewer bidders and less buyer exhuberance at auctions. There appears to be a growing number of properties being passed in and more negotiated post auction.

Stock levels have peaked and in my view on the decline. Speaking to a many of real estate agents the number of listings appears to have dried up for now, a trend which may continue through at least til August.

Louis Christopher released some very intreresting and surprising data last week showing Melbourne’s vacancy rate falling to a near 10-year low. these new figures highlight an increasingly unaffordable “landlords’ market” in the city.

SQM Research figures show just 1.7 per cent of the properties being offered for rent in the city remained available in February, equating to 8693 residences. This was down from 2 per cent in January.

According to Mr Christopher “This is quite remarkable — despite predictions of a looming apartment oversupply in inner-city Melbourne, we are seeing vacancies fall rather than rise,” he said.

“Even in the Docklands the vacancy rate tumbled to just 2.4 per cent last month, down from a high of 6 per cent in December.”

The figures have been released on the back of the Victorian Government announcing that property owners who leave residences empty will be slapped with a new tax from January 1.

Should vacancy rates continue trending down, landlords who are set to endure recent interest rate hikes will seek to cover the extra repayments at the expense of tenants.

 

Source: PIXABAY

 

New Population Growth Figures Has Doomsayers Seeing Red

 

The latest ABS population figures show that a jump in interstate migration, in overseas migration and in births lifted Victoria’s population by 157,500 to 6.1 million in the year to September – an increase of 2.1 per cent, compared to 1.2 per cent in the rest of the nation.

Victoria has proven to be the hot spot for immigration, with the highest population growth rate in the country, according to the Australian Bureau of Statistics (ABS). Victoria’s 2.1% growth rate and net population growth of 17,200 brings it above the nation’s average of 1.42% between 2015 and 2016, being the only state above the national average. 

Such a record breaking surge has not been seen since the Victorian Gold Rush days and the post World War II with the influx of southern European immigrants. Along with immigration, Victoria’s population is also increasing naturally through child birth (41,700) resulting in the population which makes up 25.2 percent of the national total.

Better job prospects, lifestyle and cost of living in Melbourne has made it more appealing to prospective residents, according to some reports. Employment increased 97,300 over the last 12 months, Victoria’s employment accounts for a majority of Australia’s total job growth. Victoria has also welcomed 29,500 new residents from NSW where only 2000 new jobs were created and a higher cost of living with low wages growth has seen residents looking for alternatives. Other interstate migrations to Victoria include 15,200 from Queensland, 11,500 from Western Australia and 9,700 from South Australia.

At this rate, the ABS projects Victoria’s population to grow to 9.9 million by 2056, with Melbourne’s population equaling that of major cities like New York. This raises many questions about whether Victoria is ready for such growth and will be able to cope with this continual frowth in the future.

It is predicted that residential development will be focused on the western and northern metropolitan areas, with 92% of new Victorians choosing to settle in greater Melbourne.  This has called for pressure to decentralise Victoria and develop regional centres such a Ballarat, Geelong, Bendigo, Shepparton and the Latrobe Valley, as more attractive places for Victorians to settle and raise families.

The building of new infrastructure and discussions about the decentralisation of work must become a priority for both State and Federal Governments if Melbourne is to continue to be a “liveable city”.

The doomsayers will have you believe that it’s all bad news, that we don’t need immigration and why should we allow Chinese immigrants to buy into our country anyway?

Property prices are being driven up by foreigners and investors but as I have said previously this is not for all property types. I am happy for foreigners to buy the housing stock especially off the plan apartments which for many Aussies are not ideal for living. Every property sale treansacted, puts more money into the Australian economy and creates jobs. So until we become a nation of a significant size and capacity enough to sustain ourselves as an economy we need every foreign investment dollar we can get!

 

Summing Up

I will leave you on a sobering note. With the US Fed expected increase interest rates further this year by 3-4 times, many economists predict an imminent fall in the Aussie dollar. This means foreigners with US currency will be able to buy into Australian property at cheaper prices thanks to lower exchange rates so i expect more interest from foreigners especially the Chinese. Also worth considering is the general belief that China has a property bubble about to burst and investing in Australia is an asset protection strategy.

On the surface there appears to be enough evidence for the property market in Melbourne and Sydney to continue holding up, at least in the short term so i don’t see any dramatic corrections in the near future. Australia’s succes or failure as an economy is very much dependent on what happens globally. My fear is that if there is a substantial downturn in China there will be repurcussions here. Suburbs which have seen inexplicable price rises as a result of a dissproportionate surge in Chinese residents will also be under significant pressure and proned to price shocks, much like what occured in Melbourne during the Asian crisis in the late 90’s.

We’ll be back after the school holidays when the property market picks up again.

 

Congratulations to our very loyal client Derek who succesfully sold his property over the weekend!

Thanks again for your support, it was a tough negotiation but we got there in the end with a fantastic result!

 

Feel free to call me if you have a property question on 0418 740 606 or 9863 7514

 

Street Advocate Client Reviews

Peter,

Just a short note to thank you once again for your help in selling the property.

Dealing with you Peter was a pleasant experience, you were very professional with all aspects of the sale including:

·         Your knowledge of the real estate industry

·         Negotiating down the agents fee.

·         You understanding what marketing campaign was needed and directed the agent accordingly

·         Keeping me up to date by communicating via phone, text , email and weekly meetings

Not only will I use you in the future but I would have no problem recommending other vendors to you.

Thanks once again, Arnie Nuzzo

6 Highett Rd, Hampton

 

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