Melbourne’s recent restrictions easing has been well received across the state. Small businesses, restaurants and beauty industries have rejoiced in the news. This week’s further easing sees retail opening up for trade, perfectly timed for the upcoming racing carnival and in the lead up to Christmas.
One industry which has been extensively affected by the COVID restrictions has been the real estate industry and in turn, the property market. Unlike many other industries which had very limited trading or services, the real estate industry has risen to the challenges and used innovative means to remain viable. This move has had a direct impact on the thriving property market.
Virtual inspections and appraisals, online auctions have helped the industry continue to thrive, despite all obstacles. REA Group Senior Economist Eleanor Creagh says Melbourne’s property market is seeing seller confidence return amid the easing of restrictions. “We’re certainly seeing that seller confidence is on the up, as restrictions have eased,” she told Sky News Australia. Last weekend there were 1,080 scheduled auctions, both online and onsite with restrictions. Victoria’s auction clearance rate this weekend was 77%- a great indicator that demand is strong and most likely exceeding supply.
Key factors to these favourable circumstances are the consistently low interest rates at approximately 2% across the big banks, which are likely to be tightened shortly. Fortunately Windsor Capital provides a safe and effective solution to developers looking for financial aid in their upcoming projects.
Add to these low rates are the limitations on travel both international and domestic, seeing savings accounts bolstered by limited expenditure. Thus creating the opportunity for buyers to stretch their search to higher priced homes as their deposits increase. Lenders have been extremely flexible and enabled greater borrowing capacity. With many Victorian residents working from home, the need to create or seek space and comfort has become paramount.
Victorian Government incentives have also been a contributing factor particularly for first home buyers with No stamp duty tax on properties up to $600,000; Reduced stamp duty tax on properties up to $750,000; Off the plan concessions.and First Home Owner Grants. First home buyer grants of $20,000 applied to regional purchasers up to $750,000, has been a significant factor in the increase in supply on regional properties.
Strict restrictions throughout the year have impacted the property market as witnessed with large numbers leaving Melbourne to move interstate and or to regional areas. This surprisingly has not had a negative effect on market prices, in fact the opposite. The move to coastal areas increased significantly during the past few months with suburbs of Dromana, Rye and Geelong seeing increased demand. One of the factors is that working from home no longer demands working or commuting to CBD. “With proximity to the CBD no longer being such an issue many can seek relative affordability and more space in outer suburbs,” Ms Creagh said.
With a hot Spring market gearing up, it will be interesting to see how the property market plays out.
To find out more visit our website www.windsorcapital.com.au