15th December 2020: Your Quarterly Market Update for Summer

YOUR QUARTERLY MARKET UPDATE FOR SUMMER

As 2020 draws to a close, we're collectively breathing a sigh of relief after what has been an often challenging, unknown and eventful year! We are absolutely thrilled to see Victoria starting to come to life again, as we move towards some normality. With the real estate industry's traditional Spring selling season delayed, we are seeing greater activity over the Summer months.

Real Estate Institute of Victoria (REIV) President, Leah Calnan says that the Victorian real estate market is starting to shine as COVID-19 restrictions ease, with homes across the state taking less time to sell. The October 2020 'Days on Market' metric from the REIV revealed that the average Victorian home is spending just 33 days on the market before being sold, the lowest recorded figure since 2009.

Montrose in Melbourne's east is the fastest area in the state to sell a house, with homes being sold in just 14 days!

We have certainly seen this demand reflected in our sales results post the Stage-4 lockdown, with most properties selling at auction either under the hammer, or in post-auction negotiations shortly thereafter. The number of sales achieved by private treaty is also encouraging, with Ms Calnan noting that, "competition between buyers is heating up, and people aren't waiting to purchase the property they want".

Data from the Domain Group reported an average clearance rate of 60.9 per cent in October 2020, a solid outcome considering that Melbourne was under a strict lockdown and in-person auctions were banned for most of the month. They further report that the median auction price for Melbourne houses was $991,000 in October, unchanged from one year ago.

The rebound in consumer confidence is largely due the fall in COVID-19 case numbers, coupled with the reduction in borrowing costs. The latest data from ANZ-Roy Morgan showed that weekly consumer confidence rose by 3.4 per cent in mid-November, to be at its highest level in more than either months – and this was above the neutral level for only the second week since the pandemic began.

As part of its measures to help the country recover economically, the Reserve Bank of Australia (RBA) lowered the official cash rate to 0.1 per cent. RBA Governor, Philip Lowe said that it did not expect to raise the cash rate over the next three years, providing both households and businesses some much-needed certainty over their individual borrowing rates in the near term.

State governments are also taking advantage of very low borrowing costs, with the Victorian government announcing temporary stamp duty relief for those purchasing property up to $1 million in a bid to stimulate the property market. The Andrews Government will waive up to 50 per cent of stamp duty on newly-built or off the plan homes valued up to $1 million until 30 June 2021, whilst existing homes will be eligible for a 25 per cent stamp duty waiver.

In the rental market, the REIV reports that Victoria's vacancy rate rose to 4.6 per cent in October 2020. Regional Victoria has fared better than its metropolitan counterpart, with a fall in vacancy rate to 1.2 per cent. However, the median rent for houses rose in metro Melbourne to $485 per week. The weekly median rent for houses in regional Victoria fell slightly, to $360.

On behalf of the entire team at Fletchers, I wish you a safe and happy festive season where you can reconnect and enjoy time with family and friends (Zoom free)!