If you've been frustrated by the lack of properties for sale this year, you're not alone. However, despite a slow start to the year, the Melbourne property market is showing signs of recovery, with a significant increase in new listings in recent weeks.
CoreLogic reports that sales volumes in Melbourne have been down by more than -21% over the past 12 months. This means that the number of properties sold in Melbourne has fallen significantly compared to the previous year. However, it is important to note that rising interest rates and softening prices have largely driven this decline. Despite these challenges, demand for property has remained relatively strong, with auction clearance rates remaining steady in the high 70s. But this level of contraction is significant, particularly compared to other Capital Cities.
The time taken to sell a property hasn't changed much, with the Median Days on Market remaining at about 30 days. This suggests that sellers are generally meeting the market's price expectations.
Online enquiry and attendance at opens have been good, particularly over the last couple of months. This is good news for sellers, as it suggests that there is a strong level of buyer interest in the market. However, it is also worth noting that auction clearance rates have remained steady, suggesting that buyers are still driving hard bargains.
For sellers, it's a great time to showcase some key property features: gardens are in bloom, pools look inviting, alfresco areas are usable, and open doors bring the outside in.
The recent increase in new listings has been driven by a number of factors, including:
- The RBA has left interest rates on hold a few times now, and the general consensus amongst economists is that the bulk of (if not all) interest rate rises are behind us. This has given people more certainty about their borrowing capacity and has made them more likely to put their properties on the market.
- Sellers are usually buyers as well, so the improved market conditions have also made them more likely to sell.
- The remarkable influx of new migrants has re-energised the market. Net Overseas Migration into Melbourne in Financial Year 2022-2023 was estimated at 125,000. That's more than 10,000 people in our city each month, about 2,400 each week. The Centre for Population Projections expects about 100,000 again in Financial Year 2023-2024.
It's important to recognise that 72% of migrants who enter Australia under the Permanent Migration Program do so under the Skilled Stream. This program is designed to improve the productive capacity of the economy and fill skill shortages in the labour market. These affluent new migrants need somewhere to live and are expected to transition from the rental market to the buyer market in the coming months.
The last 18 months have been challenging for property owners and buyers alike, but the recent increase in new listings is a positive sign for the Melbourne property market. Greater transaction volumes over the next couple of months will tell us a lot about market trajectories in the year ahead.
If you would like to discuss listing or purchasing a property in greater detail, please contact any Nelson Alexander office.