fbpx

Be vigilant on value this spring

September 15, 2022 BY

With Gareth Kent

The engineered slowdown is affecting the broader market, with reports of property values plummeting in most major cities.

Overall, in the past 28 days, national property markets are down 1.4 per cent, up 3.1 per cent from where they were last year. However, localised statistics tell us that the Victorian regional areas, including the Geelong, Surf Coast, Ballarat and Bendigo regions, have not yet experienced this slowdown.

Typically, when Melbourne has a decrease or slows down, our regional markets have stagnated or stepped sideways. As previously stated, affordability and lifestyle continue to protect us. Noting the recent cash rate increase of 0.50 per cent, lifting it to 2.35 per cent; will have a twofold impact locally. Firstly, I think this could now be where larger mortgages become stressed for overextended middle-income earners, creating opportunity. Those seeking a similar lifestyle for less value will look to regional areas, which will help our market stabilise.

On the other hand, lower income earners who scrapped for the dream home in our estates are likely also to feel this pinch hard, and many will become mortgage prisoners for some time. I expect most to hold on, with the average equity in these homes helping them for a short period. Land estates with increased building costs will likely continue to struggle for the time being (63 per cent down on sale volumes). However, there are early signs that the market is looking for a bottom as auction clearance rates have risen (62.6 per cent nationwide) despite more properties being offered for sale.

There is light on this horizon – spring.

Local agents have reported listing levels are slightly up in the winter months, with many vendors looking to sell before further rate rises. We have experienced fairly flat spring cycles in the last few years, undistinguishable from the winter months. However, we now return to a traditional seasonal market of rising listing numbers, with demand likely to match listing increases rather than outstrip them entirely.

As we head into the spring, buyers and sellers must be more vigilant with the values they agree to sell or buy for. It is a challenging time for many agents who have not experienced downturns. Many will not have the skillset for determining value, and some will panic, pushing for quicker sales and lower values from their vendors. In short, do your homework.

Here is a tip: put yourself in the shoes of the purchaser. Go for a drive past other sold properties that would also satisfy your requirements compared to the home you are considering. Sales results are accessible online very quickly. When making the comparison, be very careful to consider geographic changes; crossing a highway, river or bridge, even within the same suburb, can change the locational aspects and shift the value matrix of that particular property.

It’s time to have your eyes open and seek advice from professionals who have experienced these shifts, but in the end, your property decision is yours alone, so own it.

Visit prp.com.au

Surf Coast Times – Free local news in your inbox

Breaking news, community, lifestyle, real estate, and sport.