Are we there yet?
No one sets out to pay the highest price for a property and with Australian house prices dropping over the past year or so, everyone is looking for the bottom of the market – the time when house prices will be the lowest. There is some indication that we might just have reached this part of the market cycle.
Making accurate predictions about the property market is difficult at any time, but in this cycle is made harder because, unlike other market downturns, this current market is associated with a tightening of credit. Recent figures suggest that this tightening is starting to ease. Loan applications which were taking weeks during 2018, are being approved more quickly now and fixed mortgage rates are coming down. These are signs the banks are becoming more competitive again after the nervousness that surrounded by the banking Royal Commission.
Auction clearance rates have also increased in the early months of 2019; a strong indicator of an improving market. The time it is taking to sell a property (days on market) is still slow – 61 days in Melbourne; this was 28 days twelve months ago (CoreLogic). This figure is in line with the large number of properties advertised for sale.
The fact that people are still listing their properties is one indicator that consumer sentiment is growing in confidence. There is also evidence of greater interest in property in general, with more people attending open-for-inspections. Other indicators which go hand-in-hand with this would be more bidders at auctions or even, a rise in the number of properties selling prior to auction; there is no real evidence of these occurring as yet.
In the property market, hindsight is always 20-20; we will definitely know the bottom when we see the prices rise. Properties are bought and sold during every part of the property cycle; if you think the time is right for you to invest, contact Accrue Real Estate, experts in the Melbourne property market, to help you reach your property goals.