Spring is about to be sprung… which would normally kick off the busiest time of year in real estate.
But the ‘unprecedented times’ of COVID-19 mean that, like most of 2020, it’s likely that the selling season will also be looking different to what we’d normally see, once it comes around.
Australia’ s property prices have remained relatively resilient through the pandemic – particularly in regional areas.
That said, we know from experience that COVID-19 has imposed a great amount of unpredictability upon everything we do, and, therefore, how the long-term outlook might fare is also hard to predict.
So what are the market possibilities we are facing this Spring?
Regional growth will continue
Regional Australian property prices have continued to rise in defiance of city-based COVID-19 property trends. And Colac is leading the way for year on year growth for Victorian properties!
The latest Domain House Price Report showed that median dwelling values in regional Australia edged up 0.1 per cent over the June quarter.
The largest increases were in regional Tasmania, Victoria and New South Wales, where prices grew 3.4 per cent, 1.6 per cent and 1 per cent respectively. Mining towns and tree-change destinations – such as those found in the Colac-Otway shire – were highlighted as strong performers.
Victoria
Colac Otway
Median house price: $432,500
YoY change: 19.3%
Tasmania
Huon Valley
Median house price: $445,000
YoY change: 21.9%
New South Wales
Leeton
Median price: $320,000
YoY change: 23.1%
Queensland
Isaac
Median house price: $275,000
YoY change: 32.5%
Western Australia
Karratha
Median house price: $442,500
YoY change: 22.9%
South Australia
Renmark Paringa
Median house price: $342,000
YoY change: 31.5%
Variation across the capitals
In June, we saw fall across the majority of Australia’s capital cities (save for Darwin, Hobart and Canberra.) The falls ranged from 1.1% in Melbourne and Perth, to 0.2% in Adelaide.
With mortgage repayment holidays to end this Spring, there’s also a chance of a fall in prices, as distressed listings hit the market; this could signal an opportunity for property hunters to seek out and snare a bargain.
Rents trending lower
Rent values fell 0.5% across Australia during the June quarter.
This is the largest quarterly dip since September 2018.
Until then, we had seen the rental market showing signs of a rebound, but experts predict this is the beginning of an ongoing slide, as unemployment in the hospitality, tourism and arts sectors drags on and the migrant rental demand dries up as international borders remain closed.
Low interest rates continue
Interest rates remain at an all-time low after the Reserve Bank of Australia cut the cash rate to 0.25 per cent in March.
It’s widely predicted the cash rate will remain where it is while uneployment climbs.
Property hunters unimpeded by the COVID-19 downturn will find themselves in a strong position, as the competition between lenders heats up; some variable rates have even dropped below the 2% mark. Contact our Mortgage Broking team today to discuss how you can make the most of this situation.
This also means that if you already have a mortgage, but aren’t looking to purchase another property, now could be a good time to refinance. Again, our Mortgage Broking team is the best place to start to look at what the market can do for you. Contact us today.
Tips for nabbing a bargain this spring
Arrange pre-approval early
When you do come across a bargain, you’ll want to be sure your finances are in order. Now is the time to organise pre-approval on your finance for your spring property purchase.
Make sure the local real estate agents know you are looking
Get in touch with your local real estate agents to ensure that you’re the first person they think of when a great new property hits the market. This is how off-market and just-listed deals come up.
Find out why the vendor is selling – and how it can help you negotiate a better price
If you know why a house has been put on the market, you can be in a better position when negotiating the sale. For example, if you find out the vendor has bought a property soemwhere else, and needs a quick sale, you might be in the position to offer a shorter settlement term in return for a discounted price.
Whilst the pandemic has thrown plenty of spanners into the mix, it’s important to remember there are still opportunities for savvy buyers. Whether you’re looking for an investment property or fresh start in a new home, we’ll provide the support you need.
