Hi,
The auction clearance rate jumped again to 79% on 544 auctions across Melbourne. 306 properties sold at auction, 122 sold before auction and 1 sold after auction. In addition there were 147 private sales. Very similar numbers to last year where there were 537 auctions reported to the REIV resulted in a clearance rate of 79%.
Australia’s population is growing at record rates according to the Australian Bureau of Statistics. In the year ending 30th of September, 2023, the country’s population grew by 659,800 (2.5%). 111,000 people was a natural increase and 548,800 was a result of net overseas migration. This is an increase of 206,500 from the previous year.
Broken up into states, Western Australia is leading the charge with an overall population increase of 3.3%, then Victoria with an increase of 2.9%, Queensland increased 2.7%, New South Wales increased 2.3%, ACT had an increase of 2.1%, South Australia increased 1.7%, Northern Territory, 0.7% and Tasmania, 0.3%.
This population growth is putting huge pressure on the housing market and is far out-running the dwelling approval rates which are below pre-pandemic levels. National Cabinet agreed to an ambitious new national target to build 1.2 million new well-located homes over 5 years which is a level never achieved before but it has been argued that only half of these homes would be finished in within that timeframe.
Ongoing supply issues across the country is what is maintaining/increasing property prices to where they are at, even with the interest rate rises. Rents are surging and likely to continue to do so as it is getting harder for people to enter the property market.
Over the weekend, a townhouse in Newport sold well above reserve with 2/176 Woods Street going to auction. The three bedroom, two bathroom townhouse was listed at $750,000 to $790,000 prior to auction and attracted five bidders at auction. The property sold for $902,000 under the hammer which was well above the $795,000 reserve.
The most expensive sale for the week was at 5 Redmond Street, Kew which is a five bedroom, four bathroom modernist architecture design located close to the Yarra River. The property was quoted at $4,300,000 to $4,700,000 prior to auction and sold for an undisclosed price.
Have a great week
Kim Easterbrook
Update from Chris Devlin, Managing Director – Quora Financial
The Lending Market remains buoyant though the market reflects two distinct tactics ultimately designed to save money. That’s the conclusion we drew from interviews with three major lending partners last week.
Group One are Buyers. They are trying to purchase property now while the market is softer due to high interest rates and other inflation pressures. They’re trying to secure their property for a better price. They’re not wrong. The correlation between property prices rising when interest rates drop is assured. Borrowers spend more for the same property when their borrowing capacity increases. Group One have concluded that they can withstand the high-interest rates now and is hoping interest rates will fall after they secure their new property. 20% of new loans are ‘approvals in principal’ and 35% of new loan approvals are property purchases with a Contract of Sale in place already.
Group Two want to start their interest rate cuts now. They reflect the existing market’s desire to save money anywhere they can. The major lenders have noticed that offset balances market-wide are reducing while simultaneously credit cards are not being cleared monthly as often as they had been up to 18 months ago. Existing mortgage holders want to save money anywhere they can and will interrogate their mortgage interest and fees to help. A rate drop of just 0.1% or 0.2% is often enough to trigger a refinance for borrowers with an average Australian mortgage size of $624,000.00. 40% of current loan approvals are for refinances.
As always, the lending market represents opportunity. Are you choosing Red or White wine?
Chris Devlin, Managing Director – Quora Financial
