Hi,
Auctions in Melbourne have commenced for 2024 with clearance rates hovering in the high 70%’s to 80% which are the highest clearance rates that have been seen in quite some time. Last weekend, there were 675 auctions reported to the REIV with 395 selling at auction, 140 selling before auction and there were an additional 110 private sales. There has been an increase in properties selling prior to auction with many vendors willing to sell if they receive a reasonable price rather than holding out to auction.
Talk of interest rates nearing to the peak and even declining later in 2024 is giving buyers confidence to purchase. Over the Christmas break, we experienced extremely high level of enquiries from new buyers wanting to enter the real estate market (all different market segments, investors, first home buyers, upsizers and downsizers). There have been so many reasons for buyers not to buy over the past four years, mostly being due to market uncertainties as a result of Covid and then rising interest rates. But now it appears we nudging closer to inflation becoming under control and we are well and truly past the Covid lockdown days. So 2024 is feeling like a good year for many buyers to finally make the move to either buyer a new owner occupied property or buy an investment property.
Whilst there has been a number of investors sell their investment properties over the past six months (due to rising interest rates and holding costs) there seems to be a number of new investors wanting to enter the market. Lending to property investors has reached a six-year high with the ABS reporting that in December, 36 per cent of all housing finance went to investors. Rising rents and low vacancy rates, in addition to ongoing housing supply issues are making it appealing for investors to enter the market. This new wave of investors will likely be price sensitive though, as the increased interest rates will likely cap budgets for many in addition to investors wanting to minimise impact to their cashflow.
2024 is looking like an exciting and positive year for the property market. Stock levels have been healthy so far this month and the word from many selling agents is that this should continue. On the flip side of this, buyers have a lot more confidence to purchase as the market sentiment improves. So at this stage, it looks like there will be lots of transactions this year with good levels of stock to buy and the buyers in the market to purchase these properties.
