What’s expected in Melbourne property 2021
Frenzied competition is already back on Melbourne streets post-lockdown. Here’s the industry outlook.
Melbourne’s real estate market has defied expectations, recovering rapidly despite the tribulations brought by the COVID-19 pandemic.
Border closures, job losses and harsh stage four restrictions sent the market into hibernation, but industry experts say we have already reached the other side.
Barry Plant chief executive Mike McCarthy reported frenzied competition for properties as buyers and sellers made up for time lost in lockdown.
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It meant initial economic forecasts of a “30 per cent price drop” never came to fruition, Mr McCarthy said.
“It’s been as strong a recovery as I’ve ever seen in my time in real estate,” he said.
Mr McCarthy said the bounce back was similar — if not stronger — than the upswing after the 2019 property downturn.
“The demand is more intense than it was a year ago. The week after we came out of lockdown it was like an explosion of activity,” he said.
CoreLogic reported every capital city and major regional market had a January home value rise, as bumper activity pushed the national index up 0.9 per cent to a new peak.
Melbourne house and unit values rose 0.4 per cent in the month, taking the quarterly rise up to 2.1 per cent, to hit a $692,162 median.
LESSONS FROM 2020
Ray White Victoria and Tasmania chief executive Stephen Dullens said buyers and sellers should stay confident in the “fundamentals of property” investment, which had weathered the storm of uncertainty and the COVID-driven downturn.
Ray White’s Victorian offices had an “all-time record high” for sales in November, following the relaxation of restrictions that allowed buyers and sellers to transact more freely again, Mr Dullens said.
“Then we broke that record in December, and our results are up 70 per cent on January last year,” he said.
“Property is always going to be seen as a big long-term asset for most families.”
FIERCE COMPETITION AHEAD
Mr Dullens said he expected the bumper summer selling season to carry well into autumn.
“It’s definitely a sellers’ market at the moment, simply because of the lack of stock compared with the demand,” he said.
“We are still seeing listing (numbers) really tight, and even though we are getting new ones coming in, they are turning over much quicker.
“With stamp duty concessions, interest rates being really low and a lot of incentives for people to get into the market, I can’t see what’s going to change the intense level of competition for buyers.”
Mr McCarthy said vendors and buyers should not delay entering the market.
“People need to keep a long-term view. It’s extremely unlikely you will be picking up a bargain at the moment, so go hard early,” he said.
“You’ll never know if you paid a couple thousand more than it was worth, but you’ll regret not going for something you like.”
COVID-19 OUTBREAKS
Philip Webb chief executive Anthony Webb said he did not think “inevitable” new cases of COVID-19 would upset 2021’s booming market.
“The reality is, we are going to see these outbreaks,” Mr Webb said.
“If outbreaks happen more frequently, it might shake the confidence of vendors who want certainty (before listing), which will only add to pent-up demand.”
Nick Johnstone Real Estate director Nick Johnstone tipped the pandemic to influence buyers’ decisions as people favoured lifestyle locations, such as Sorrento, Rye and St Kilda, which have already recorded growth in demand, according to realestate.com.au.
“After last year’s lockdown, everyone wants to be near shops, schools and to have enough space around them,” Mr Johnstone said.
PREDICTIONS
“If people can get through a property to look at it, people will still transact, so I can’t see COVID-19 outbreaks having a big impact on the market.”
– Mike McCarthy, Barry Plant chief executive
“As businesses become more open to working from home, buyers will have more opportunities to make a change in lifestyle and move regionally.”
– Stephen Dullens, Ray White Victoria and Tasmania chief executive
“Now is a good time to list. We will see some ebbs and flows over the next few months but if I had a property I was thinking about selling I would be wanting to get it on the market.”
– Anthony Webb, Philip Webb chief executive
“We’re seeing a lot of people looking to lock in a long-term property and expats returning are really going to push the market’s competition up even further.”
– Nick Johnstone, Nick Johnstone director
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Originally published as What’s expected in Melbourne property 2021