24th June 2024 / Jeremy Desmier: Market Update | 22 & 23 June 2024

Across Melbourne, there were 920 homes taken to auction, compared to 1,083 the previous week and 744 a year ago. CoreLogic reports that Melbourne's preliminary clearance rate came in at 72.9%. This is the second highest preliminary clearance rate so far this year, behind the week ending 11 February.

Over the weekend, two bidders competed to secure the desirable, single-level home at 5 Boardman Close in Box Hill South. Zoned for Box Hill High School and just minutes from Deakin University, the property was sold under the hammer by Auctioneer Ian van Eijk for $850,000.

Three bidders were in contention to secure 2/20 Erskine Avenue in Reservoir, which offered the opportunity live in, renovate, or purchase as solid investment. Boasting original charm, the property was sold by the team at Fletchers Bundoora for $721,000.

Offering prospective purchasers the perfect first home, downsizer or investment, the elegant two-bedroom, single-level home at 2/7 Through Road in Camberwell was sold post-auction by Director Spring Chen for $770,000.

The REA Group notes that the Australian housing market has weathered significant challenges over the past five years, showing remarkable resilience despite a global pandemic, multiple interest rate increases, and high inflation.

The latest data sheds light on the current state of the property market and offers insights into its trajectory for the remainder of the year:

1. The total value of residential dwellings in Australia surged by $209.4 billion this quarter, reaching $10.7 trillion. This represents a 2% quarterly increase and a 9% year-on-year rise.
2. The number of residential dwellings rose by 52,700, totalling 11,176,100 this quarter. This 0.5% increase during the March quarter equates to one property per 2.4 people.
3. New building approvals dropped by 0.3% month-on-month but grew by 3.5% compared to last year. Before January 2020, the average number of completed properties per 12-month period exceeded 200,000 but this average has fallen to around 170,000 due to an 11% decrease in approvals over the 12-month rolling period, according to April data.
4. There is an immediate need for 90,000 new tradies, with an additional half a million required over the next five years to meet the target of 1.2 million homes by 2029. This skilled labour shortage, coupled with soaring construction material prices, is hampering the construction of new homes.
5. New lending for total housing increased by 4.8% in Aril to $29.4 billion, following a 3.8% rise in March. This figure is 24.6% higher than a year ago. This suggests growing buyer confidence and a positive outlook for rental property availability as investors return to the market in greater numbers.

As we move through the remainder of 2024, these trends are likely to continue, although ideally an increase in new approvals and a resolution to the skills shortage is needed to speed up the number of new properties being built.

This week, around 2,060 homes are expected to be taken to auction across the country. If you need any real estate advice this Winter, please give us a call.