6th November 2023 / Jeremy Desmier: Market Update | 4 & 5 November 2023

It was a quieter auction weekend due to the Melbourne Cup public holiday on Tuesday, although there were plenty of buyers out and about at open for inspections, enjoying the sunshine. The REIV reported a clearance rate of 68%, on a very low 268 auctions reported.

The Art Deco, three-bedroom home at 14 Inverness Way in Balwyn North located in the prestigious riverside Estate attracted two bidders. Surrounded by magnificent gardens, the home is zoned for Kew High School and Balwyn North Primary School and offered the successful purchaser opportunity to extend. The property sold under the hammer by Auctioneer David Taylor for $2,835,000.

Meanwhile in Bundoora, the stylish four-bedroom home at 10 Barton Court saw two bidders exchange bids to secure the well-located property. After being passed in by Auctioneer Sarah Lowry to the highest bidder, the property was sold post-auction for $947,500 to a family looking forward to making it their own.

Stronger than expected conditions over the past three months have promoted NAB to revise up its near-term forecasts for the capital cities, with the bank now expecting prices to gain 8% this year, up from 4.7% previously forecast. Prices are tipped to rise a further 5% in 2024 – unchanged from its latest forecast – for a total 13% growth over two years.

NAB chief economist, Alan Oster, said property prices "continue to be supported by a significant supply-demand imbalance", despite rising rates and reduced borrowing power.

"For 2024 we expect prices to rise by around 5% with population growth, rents growth and the labour market still supporting, offset by some pressure from the ongoing flow-through of higher interest rates," Mr Oster said. The higher price forecasts come even as NAB expects higher inflation to force the Reserve Bank to increase the cash rate, before remaining on hold until the second half of 2024.

Whilst strong price growth is expected across the combined capital cities over the year and next, the momentum will vary between states, with Melbourne the only capital city expected to see prices accelerate next year.

In other property news, investors are reported to be trickling back into the market to capitalise on record-low vacancy rates around the country. New investor loans rose 2% in September and were 2.6% higher than the same time last year, according to the Australian Bureau of Statistics. The national vacancy rate reached a record low of just 1.06% in October and was expected to decrease further unless more rental stock became available, or new homes were built.

The coming weekend will see auction numbers pick back up, as we rapidly move towards the festive season and the end of the year. Please give us a call if you're hoping to secure a sale prior to Christmas, or wanting to begin preparations for an early 2024 sale.