What will our spring property sales season bring?

SPRING is in the air. Flowers are starting to bloom, blue skies above, yet the lingering winter chill reminds us – it’s not done just yet.

The property market feels somewhat the same and listing numbers are starting to build. Some high-end properties have come onto the market, and auction clearance results are a healthy 72 per cent for the region, proving that demand is growing with supply. The RBA has finally arrived at the party, better late than never. At least they brought a present.

Of course, we have the lingering uncertainties, such as Jim Chalmers’ Economic Round Table. Although created to address productivity, what has emerged are more hints of property taxes, primarily aimed at superannuation investments; no surprises there. A bold reform would have been a complete reboot of the tax system, increasing GST, expanding its application, and doing away with about 275,000 other taxes, including income tax.

Stamp duty is another measure that needs to go. If we really want to address housing affordability, then stamp duty is the massive barrier that prevents young homeowners from getting a foot in the door. Stamp duty costs in Victoria have grown between 2.7 and 3.4 times faster than incomes since 2000 (source: Domain). This tax prevents people from downsizing and blocks out first-time homeowners. It reduces home mobility and exacerbates mismatched housing, leaving large homes in the hands of would-be downsizers. Did you know that 61 per cent of households are one or two people, yet three- and four-bedroom homes make up 70 per cent of our housing stock (source; cotality). Stamp duty discourages investment and weakens productivity as workers cannot easily relocate, and many people are forced into long commutes. From a state revenue perspective, it’s tied to the property cycle and is unreliable and hard to budget for. Alas, boldness is not a characteristic of our political players these days!

But don’t let these distractions overshadow what is going to be a great spring and summer, and there are so many opportunities on the market right now and more coming on. I thought I would leave you with a little tip I use when hunting for property.

“Highest and best use” is crucial in understanding the actual value of property. This is the most profitable and legally permissible use of a property, considering its physical characteristics, financial feasibility and market conditions. The trick to finding value within this concept is identifying properties that do not meet these characteristics. A property being used for a lower use will sell at a lower value, allowing you the opportunity to buy and return it to its highest and best use, realising its higher value. Our CBD is littered with property not at its highest and best use, and is well undervalued, so in Geelong we have plenty of these opportunities to choose from. And if you have taken a walk through the city recently, you will see the abundance of building works going on.

Our CBD is about to blossom, and the opportunity to get in before it grows is right now! Happy spring.

//SPONSORED CONTENT