2nd May 2023 / Jeremy Desmier: Market Update | 29 & 30 April 2023

As we head into the final month of Autumn, the real estate market has undergone some significant changes. Interest rates have been the primary factor responsible for these shifts, however market conditions are still proving positive as various other aspects are contributing to its growth. In this update, we will discuss the market dynamics that are at play right now and what buyers and homeowners can expect as we prepare for the Winter selling season.

The population growth rate has been the cornerstone of demand for the Australian real estate market. Though there was a dip in immigration last year, it is expected to remain consistent for the remainder of 2023. Last year, net immigration stood at around 320,000, up from a mere 5,940 in 2021 at the peak of the pandemic. This rise is promising for the real estate market as an increase in population implies increased demand for homes and rentals in both urban and suburban areas.

Interest rates have been a hot topic of conversation in recent months as the Reserve Bank of Australia (RBA) worked to combat inflation, resulting in the heat coming out of some market places. For homeowners feeling uncertain about what could happen next with rate rises, last month saw RBA take a step back and pause their hikes - raising speculation that when they meet today we may be met with more positive news? We wait to hear.

Recent price hikes in terms of material and labour costs, continue to dampen enthusiasm for buying-to-renovate properties. This, coupled with multiple construction companies facing difficult times ahead, means there can often be some exciting opportunities available in the section of the market if you are prepared to take a risk.

We have also witnessed a stark rise in rental prices, with rental yields increasing by an average of 3.6%. Property managers suggest that the rise is in part due to the reduction of new properties becoming available for rent and the re-absorption of a large number of foreigners into the market. Some reports suggest this may lead to an increase in the number of rental properties available, ultimately easing the strain on prices.

With fewer homes put to Auction on the weekend, our group strategically achieved a 100% clearance rate, standing above the state's average of 80%.

In Fletchers news . . .

The brand-new home at 20 Sherwood Road in Surrey Hills was a well-attended auction on Saturday. Positioned in a prime location, the home was highly sought after at auction with five bidders pushing the property $100,000 above reserve. Conveniently located close to Wattle Park and the tram with easy access to leading private schools, the campaign was expertly handled by selling agent Spring Chen and auctioneer Jeremy Desmier with Ms Chen commenting that the result reflected 'the perfect family offering which had all the benefits of modern living'.

An incredible result was also achieved for the sale of 25A Beacon Street, Vermont South. This four-bedroom, three-bathroom residence was a sight to behold - right on the doorstep of vibrant shopping and dining options, as well as convenient transport links and plenty of educational opportunities within easy reach. Selling agent Michael Gurry said that when he listed the home, he knew it would be popular, 'however even I couldn't have predicted just well received it would be!'. The home's final bid came in at $1,384,000 - nearly $200k above reserve! It was a truly wonderful moment for our clients, and testament to Mike & his team who work tirelessly to ensure all of our properties are marketed to reach their full potential. A job well done.

The Autumn months have proved a more promising time for buyers and homeowners. Though interest rate increases and building issues will continue to shape market conditions, the return of migration, supply shortages, and other contributing factors are signaling a consistent demand for housing. If you are considering entering the market, whether that be buying, selling or leasing a property, reach out to your local Fletchers agent today who will help guide you through relevant market trends.

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