Increasing sales volumes brought about by the HomeBuilder grant and record low interest rates has seen the Victorian housing market record its highest sales numbers since the top of the cycle in June 2018, according to new data released by RPM Real Estate Group.
The group’s Q3 Residential Market Review shows buyers taking advantage of ‘once in a generation’ market conditions despite the state’s onerous lockdown from July, transacting 4,566 total lot sales across Greater Melbourne and Geelong.
While the extension of HomeBuilder drove the sale of many titled lots, the outlook for the market appears cautiously optimistic if forecast headwinds in 2021 can be managed.
RPM CEO Kevin Brown pointed to a quarter of sales that were not eligible for HomeBuilder as demonstrating a recovery in confidence, with purchasers wanting to take advantage of historically low residential borrowing costs.
Up to 90 per cent of buyers over the quarter were owner occupiers and 77 per cent of those purchasers were first home buyers, demonstrating the impact of HomeBuilder in bringing new purchasers into the market.
“What has been the toughest quarter in terms of restrictions that resulted in the effective closure of real estate for weeks on end has actually driven a record quarter, demonstrating the resilience of the property market in Victoria,” he said.
“As confidence returned and restrictions looked to ease, pent up demand drove strong results underpinned by the HomeBuilder grant.
But what has been encouraging is the number of people buying without the grant, motivated by the once in a generation market conditions that make it an opportune time to buy if you are in a position to.”
Mr Brown said investors might find positive return in regional areas where housing has performed well of late.
“Housing in regional Victoria has performed tremendously well and long-term we can see
increased demand for commuter cities such as Ballarat, which may put pressure on councils to release land faster than they could have anticipated at the start of this year.”
Regional Victorian house prices gained a healthy 5.1 per cent over the quarter and are up 7.0 per cent from the same quarter a year earlier.
Regional houses, which have been largely shielded from the direct impacts of the pandemic appear to be the one property type that has come out above all others.
As a result local developers are now looking actively at regional sites in addition to Metropolitan Melbourne, as many move to restock their pipelines after selling through titled stock due to the HomeBuilder incentive.
Mr Brown predicted a flurry of activity in market for the rest of the year as buyers seek to take advantage of the remaining months of HomeBuilder, but warned there would need to be careful intervention to continue to drive confidence when HomeBuilder ends and banks cease mortgage deferrals as well as the end of JobKeeper and continued border closures halt migration.