NATIONAL Property Buyers Victorian manager Antony Bucello has warned not to expect too much too quickly from Victoria’s property market, which continues to experience the correction it needed to have.
But while the market has slowed significantly, Mr Bucello disagrees with those who believe house prices will drop in the next quarter.
“Some pockets of some suburbs were just experiencing extraordinary growth of 20, 30 per cent per annum,” Mr Bucello says.
“But it’s just not possible to sustain that sort of growth.
“The market has well and truly corrected itself at the moment.
“People talk about the property market continuing to go backwards, but I totally disagree. I really don’t think it will go any lower.”
Mr Bucello says the REIV’s recent auction clearance rates, which have been hovering around the 55 to 58 per cent mark, are not an accurate reflection of the current state of the market.
By running his own National Property Buyers auction clearance rate, where he follows specific properties in specific suburbs, Mr Bucello says he gets a much better understanding of the state of the market in the more desirable locations.
He says his weekly cross section of more than 30 properties has generally returned a clearance rate of around 65 per cent in recent months.
“I run my own NPB clearance rate because I’m not confident quoting the REIV’s rate,” he says.
“The properties I select are the ones that I have personally been through for clients and are actually bidding on, and the ones that made our shortlist but won’t be bidding on.
“What this shows me is that the market is actually quite even, where it isn’t necessarily favouring the buyer.”
Mr Bucello says the REIV’s median house price gives a more accurate reflection of the market as a whole, with the June quarter returning a slightly higher median price.
“It has actually increased from $560,000 in the March quarter to $590,000,” he says.
“It is still a little lower than what it was in December last year, but it is not far away from that level.
“I have no question in my mind that the good properties are still doing well here in Melbourne.
“We’re not seeing the 10 per cent growth like we had in previous years, but these properties are getting the prices they are entitled to get.”
Looking ahead over the next 12 months, Mr Bucello expects the market to remain at the same level for the rest of the year.
“We may even see clearance rates improve slightly as spring comes on,” he says.
“The sun actually brings people out of hibernation and they start to actively look at properties and consider putting their own up for sale.
“If we see an interest rate cut before the end of the year, obviously there would be a whole lot of variables to then consider. I do believe there will most likely be a drop in the interest rate and that can only be a good thing for the start of the New Year.
“A slow increase in activity will lead to a slow increase in growth.”
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