PROPERTY values here on the Surf Coast have held up well well during the COVID-19 pandemic.
The median sale price for houses in Torquay is a healthy $840,000 – up from $830,000 in February 2020. Unit values have also risen from $620,000 to $662,500 over the same time period. Meanwhile, houses in Anglesea have lifted to $980,000 – an increase on their pre-pandemic median of $950,000, although slightly lower than the May peak of $1.025 million.
With that in mind, we take a look at five trends that have underpinned prices in the Surf Coast market through 2020 even in the face of the coronavirus.
Trend #1: Record low interest rates
Even before COVID-19 struck, interest rates were close to historic lows but, when the effects of the pandemic became apparent, the RBA cut them again. Right now the official cash rate is at 0.25 per cent – the lowest it has ever been. Major banks are offering fixed-rate home loans for as little as 2.24 per cent.
Just a decade ago, borrowers could expect to pay 7.5 per cent. The cost of borrowing is now substantially less than this and buyers who haven’t been affected financially by COVID-19 have been taking advantage. The flipside is that banks have toughened lending criteria and made it slightly more difficult to get a home loan. However, with the right research and a good mortgage broker, it is still possible for many buyers to get the finance they need to step onto, or up, the property ladder.
Trend #2: First home buyers are increasingly active on the Surf Coast In some very positive news, we’re seeing increased numbers of first home buyers getting into the Surf Coast property market. And why wouldn’t they be? First home buyers are currently eligible for no less than five grants and schemes. These range from first home loan super saver or first home loan deposit scheme, to concessions or exemptions on transfer duty, the first home buyer grant, and the brand new HomeBuilder scheme.
Statewide, the number of first home buyers taking advantage of the first homeowner grant for new properties has increased every year for the past five years. The pandemic has not affected this trend to date.
Trend #3: The Surf Coast is a prime destination for tree and sea changers
As we’ve written previously, we’re seeing a huge demand for property in our area from sea changers and tree changers. This demographic has always been active on the Surf Coast. However, the pandemic has increased the desire for many to follow their dreams and their heart, and pursue a better lifestyle outside of the city. We’ve been inundated with enquiries from people looking to escape Melbourne and other metropolitan centres with either a holiday home or a primary residence here on the Surf Coast. Our main problem is that we simply haven’t had enough stock to meet the growing demand.
Trend #4: Low stock levels
There has rarely been a time when so few properties were for sale. This is a trend happening across the country, as sellers take a ‘wait and see’ approach. According to Corelogic data, the number of properties available for sale across Australia fell 4.3 per cent in July and there were 15.2 per cent fewer properties for sale at the same time last year, but we’re feeling it even more acutely here, given people don’t tend to move on from our area. Realestateinvestar.com.au data shows that as of September 2020 Torquay stock levels fell 30.53 per cent compared to the same time last year for houses, and 42.11 per cent for units. In Anglesea, stock levels for houses were down a massive 56 per cent. So what happens when you combine interest from multiple demographics with incredibly low stock levels? You get an effective cushion on pricing.
Trend #5: The rental market is tight
Finally, it’s worth noting that the tight market isn’t just affecting sales but also rentals. The current vacancy rate in Anglesea is just 0.13 per cent. In Torquay, it’s 0.76 per cent. Vacancy rates have been falling throughout the pandemic, making it hard for renters to move, or find a new property to rent. Low vacancies are exacerbated by the fact that many would-be buyers who can’t find the right property are deciding to rent here until they do. This means that despite fears about rents falling due to COVID-19 and the government’s rental relief emergency measures, rents have also been stable.
In short, local property prices have held up well over 2020. As COVID-19 forces many people to rethink their lifestyle ambitions, we believe many more people will look to move out of the city to places like Torquay and Anglesea. We expect the Surf Coast real estate prices will be one of the main beneficiaries.
If you’re looking to buy or sell on the Surf Coast, contact me by phoning 0488 989 011 or emailing [email protected]