Welcome to the July edition of the HUNTER Herald.
For property and finance geeks like me, July’s an awesome month because all the June data comes in and there’s oodles of commentary and analysis.
I’ll give you the nutshell version.
The official cash rate was unchanged and employment figures strengthened, both of which supported continued house price growth.
Median sales prices in Melbourne’s inner and middle ring suburbs rose above $1m as shown in this Median Map.
Here’s some of the headlines leading us through winter.
It may be winter, but property ain’t cooling.
Nope, No Siree!
Auction clearance rates (85%) and days on market (34 days) both trended at high levels in the June quarter which continues to reflect buyer demand exceeding the supply of properties on the market.
Houses that tick all the investment grade boxes (suburb, street, style, scarcity) are still flying at auction (and, in many cases, flying well beyond the vendor’s reserve).
Houses that are well priced for the value they represent are also selling at auction where the vendor has chosen a reserve reflective of market conditions and buyer interest levels.
Houses with greedy vendors who have stubborn and unrealistic price expectations and no real estate agent giving them a tough reality check are seeing their auctions tank as buyers keep their hands in their pockets. Tough negotiations ensue and, without buyers battling it out to secure the keys, the price doesn’t soar as high.
Opportunistic buyers who can spot these properties and know their comparable property sale prices can place themselves well to save tens of thousands of dollars in a private sale negotiation.
Prices will cool off through winter though, right?
Melbourne’s seasonal slowing is unlikely to help to ease price growth this year: vendors might be holding off until spring yet we’ve got motivated buyers competing for fewer properties and hoping to lock in a purchase before silly spring selling season lands.
Winter isn’t the time to hibernate (sorry.)
Tempting as it is to hunker down and ride the winter out - especially with us pin-balling between snap lockdowns - savvy buyers are taking the opportunity to get their finances in order and research the market.
They’re the ones who will be holding keys to their property before Christmas.
Use Winter to revisit your finances
Finance pre-approvals are typically valid for 3-6 months so if you’ve been hunting for a while and haven’t yet bought, yours might need updating.
If you still have room to move in your borrowing capacity you’ll also want to review the amount you’re approved to borrow.
Property price indices have increased 10% in the six months to June.
This means unless you’ve downgraded your buying criteria, you’ll have to spend 10% more to get what you want.
Expect the unexpected in the coming weeks
Any extended lockdowns will require 1-on-1 inspections and I expect real estate agents will more carefully vet their buyers to prioritise those that are genuinely interested.
Hosting several 1-on-1 inspections compared to a couple of open houses a week is obviously highly disruptive to vendors, especially if they are working from home and homeschooling.
If lockdown extends beyond next week, I expect many vendors will decide to postpone or extend their campaigns, impacting on supply.
If lockdown ends as planned, however, we will (all jump for joy, and) slingshot back to business-as-usual; inspections and auctions will resume with the now-normal mask-wearing and QR checkins.
All our fingers are crossed for the latter so we can get on with the business of buying the best properties on the best terms.
HAPPY HUNTING OUT THERE!