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Why Victoria’s Real Estate Market Won’t Freeze This Winter

Seasonality has been swept aside in Victoria’s real estate market, with strong results likely to continue through winter and into spring and beyond.

Once upon a time, spring was the time to sell your home: when gardens are blooming, homes look their best and buyers emerge from the hibernation of the colder months.

However, things have changed in more recent times and not just because of the Covid-19 pandemic.

The times of the majority of the year’s stock being sold in a third of the year in the purple patch months of September, October, February and March are over, due in part to the digital age and partly due to buyer and seller awareness. Buyers can now easily peruse homes online and vendors have become more aware of the importance of staging their homes for inspections and how to get the property looking its best, via options such as styling, no matter the season.

“That seasonality that was once a key feature of the market has disappeared,” Brad Teal, Founder and Director of Brad Teal Woodards said.

“There is a much more consistent selling and buying pattern across the year. There is no more massive sawtooth on the market graph.”

According to respected property data company CoreLogic: “Australia’s housing boom rolls on” with home values up 2.2 per cent in May in the most recently released figures.

Mr Teal said that price growth is expected to continue through winter and spring.

“There are a lot of quality family homes with buyers who have well-planned campaigns coming onto the market in winter. It is as good a time to sell right now as any. Cold weather or colder weather,” he said.

CoreLogic’s research director Tim Lawless concurred, saying that the fundamental market conditions driving prices would remain in place.

“The combination of improving economic conditions and low interest rates is continuing to support consumer confidence which, in turn, has created persistently strong demand for housing,” he said.

“At the same time, advertised supply remains well below average. This imbalance between demand and supply is continuing to create urgency amongst buyers, contributing to the upwards pressure on housing prices.”

The impact of Covid-19 and lockdowns in metropolitan Melbourne has affected the pace of growth in house prices. They have grown five per cent over the past 12 months, compared to the national average of 10.6 per cent. However prices in regional Victoria have gone up 13.1 per cent over the past year, suggesting metro prices may have some catching up to do.

“Overall, Australia’s housing market remains firmly entrenched in a housing boom across most regions of the country,” Mr Lawless said.

“The reduction in federal government fiscal support seems to have had little to no impact on housing demand or growth in home values to date. While future COVID outbreaks presents both a health and economic risk, the strong recovery in the labour market has likely mitigated the impact that the wind-down in JobKeeper would otherwise have had on the housing market. 

 

Seasonality has gone out of Victoria’s real estate market.

“Housing values are still currently rising faster than the peak rate of growth in recent cycles.

We are expecting housing values will continue to rise throughout 2021 and into 2022.” Said Mr. Lawless.

However, Mr Teal warned sellers should not try and guess or ‘game’ the market because that can invariably leave people unstuck. If you are looking to sell, you should look to sell now.

“It was only 12 months ago, some experts were predicting that the market could decline by 30 per cent. Well, that simply didn’t happen. No one knows exactly what is going to happen,” he said.

“History, like the GFC, shows that changes in the market can come out of nowhere. The RBA says they won’t lift rates for years but that doesn’t mean the banks won’t. All of a sudden momentum can change. 12 months ago, no one would have guessed the market would be where it is today and likewise, it is difficult to predict the future.

“Market conditions are great for vendors. So it is a great time to be selling your home.”

If you are an investor, seller or buyer and would like help from our team, please contact us today.