Despite the mass hysteria of the Coronavirus - COVID-19, it would appear that people are still out and about. The API's Melbourne based, South Eastern Valuers Discussion Group, held another successful meeting last night in Mount Waverley. Some of the Property Valuers were busy, while others were, less busy, in part a reflection of the current variable market.
The Property Valuers were provided with an opportunity to share with the group, and these were some of the points of interest:
South Eastern Melbourne Region, generally a 5% - 10% increase with values creeping back up to previous 2017 levels. Places like Dandenong, Endeavor Hills and surrounds were doing well where a 4-bedroom, 2-bathroom home can once again achieve a $700,000 - $750,000 price range. A price range that some consider still quite affordable.
Peninsular Region, the coast suburbs are quite variable, but many locations are also experiencing a 5%-10% increase in values. If you're in the coastal areas, the difference between a glimpse and a view of the water can be significant. Properties with good views are always in demand, whereas ones with lesser outlooks to the surrounds need to be well presented.
The Inner City region of Melbourne is a mixed bag and is dependent on many factors; the apartment market is as fickle as ever. Property Valuers have reported that buyers have become savvier, and have been avoiding "off the plans" purchases, often only becoming interested just before completion. These purchasers are sometimes opting for alternatives, more established complexes that are about 10-20 years old, perhaps due to the smaller size than some of the newer buildings are currently offering.
Valuers continue to pull back values from inflated purchase prices, many of which were marketed to uninformed foreign buyers.
The Northern Region is also experiencing an uplift. Again, 5-10% from the slump Melbourne experienced for the past 24 months or so.
Our observations:
Overseas money is still flowing in, but have been affected by the governments playing around with stamp duty, land tax and other restrictions. Foreign buyers end up paying more than local buyers. There hasn't been enough time yet to see if this will stem the flow of foreign investors and how it will affect the local market.
The Land Tax has increased, explicitly targeting foreign investors to discourage land banking. Again, international owners pay a lot more tax. The increase in Land Tax may well impact on buying choices, affecting properties with a lower land component as it may become preferred in an attempt to minimise the burden.
The Coronavirus has not affected buyer/seller activity at all, at least not yet. The buyers are still turning up to auctions. As global markets and operations adjust, it will be some time before we can measure the effects of the virus on local and global markets.
Please note the above does not form an opinion of market value and should not be considered as such, it is meant as a general overview. A prominent feature of the market is its variability, so what is happening in one location may not be happening in another. This degree of variability is unusual and reflects non-uniform consumer confidence, lack of supply in some areas, the quality of supply in other areas, to name a few factors.
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