October saw strong sentiment exhibited by both buyers and sellers keen to achieve their property goals prior to the end of 2023.
PropTrack Economist Anne Flaherty believes that many who held off their plans to sell are now listing their properties in light of greater buyer demand.
She suggests buyers are now more confident to purchase property again after a string of months where interest rates have remained relatively stable, with November being the only increase since mid-year. This has allowed buyers to have greater assurance in predicting the scope of their repayments moving forward, as well as the hope that 2024 will see interest rates begin to drop again, based on predictions from leading economists.
Melbourne was the only capital city that saw an increase in auction clearance rates in October, an especially pleasing result given that its auction volumes increased over 21% month on month, marking an 18-month high. Often, the more properties on the market, the lower the clearance rates will be, a trend that was witnessed across all other capital cities within Australia in October. Both the outer and inner East regions recorded impressive clearance results, outperforming the Melbourne average by 10.2% and 3.7%, respectively, supporting the notion that buyer confidence in these areas remains consistently strong.
Melbourne also saw properties sold prior to auction increase by almost 6% across the month, indicating that those selling their homes were potentially more open to accepting pre-auction offers to guarantee a sale, in light of more robust listing numbers.
In October, Melbourne’s rental vacancy rate remained steady at 0.9%; this is 0.1% off the record low seen in March 2023. These historically low vacancy rates are enticing property investors to re-enter the market.
An article recently published by the REA reports that according to the Bureau of Statistics, new investor loans increased by 2% in September, a 2.6% rise compared to the same period last year. It also notes that the total value of investor loans had grown more rapidly than owner-occupier loans from February to September this year.
In this article, Mortgage Choice broker Christopher Ladley confirms that investor lending had been trending upwards. “There’s an increase in investor lending because people are seeing that vacancy rates are so low that if they buy an investment property, they won’t have any difficulty attracting a great tenant. Interest rates also appear to have stabilised or may potentially rise a little further, so a lot of people believe it makes sense to buy an investment property now.” This could provide some welcome relief in a rental market that remains incredibly competitive.