Market Report

Property Market Report: April 2023

5 April 2023
by Dee Pajevikj

In counterpoint to Melbourne’s autumn, with leaves beginning to fall and the days to shorten, the real estate market is showing pronounced signs of spring for those canny enough to recognize them.

Just like Farmer Hoggett telling Babe, “That’ll do, pig. That’ll do,” at the end of that movie, every economist worth his or her salt is telling RBA chief Philip Lowe, “That’ll do, Phil. That’ll do.” And even though many people consider some of his rate rises were Lowe blows, Phil now seems chill, sitting back on his haunches, smiling, having fought his fight, knowing the inflation beast is bested and back in the box. All those interest rate rises are about done, yesterday’s RBA overreaction.

The last year, with its regular money rate rises, created a wait-and-see attitude in potential vendors and thus a shortage of stock. The upside of this is that clearance rates are very healthy, particularly in Boroondara, much better than this time last year.

Property: "Willara" | Photography: Tim Allen

If, as we at Abercrombys think likely, the interest rate hikes are nearly done, then borrowing-led spending should increase as new buyers enter the market. Their appearance will entice new stock into the market, which will naturally induce more new buyers into the space. The market is a self-energizing engine and it’s revving up again.

Investors have been the first to detect the change and are already returning to the market, which is giving the rental market, in particular, more properties to work with. As it is, well renovated homes are still selling for a premium, less affected by market downturns than other properties. Abercrombys discreet sales methodology, matched with a market knowledge verging on omniscient, will ensure you a premium price for your property.

On the other hand, the rental market resembled a game of musical chairs for the first couple of months of the year as schools went back and new jobs started and everyone was rushing to get settled and frantic not to be left standing when the music stopped. It has settled down now into a saner space and pace. But with Melbourne’s vacancy rate at 1%, the lowest it’s ever been, and the lowest in the country, we can understand the anxiety shown by tenants. It’s a good time to be a landlord. And people are realizing it’s a good time to buy an investment property and become a landlord. Investors are always the first to divine the turn of the market, and as they purchase stock more rental properties will become available, which will ease the squeeze.

The government’s new Electrical Minimum Safety Rental Standards came into effect on the 29th of March. These new standards require that rental properties have modern switchboards with circuit breakers and electrical safety switches installed. So rental providers should have been contacted by their agent to organize compliance. It could be very costly to be on the wrong side of these compliance standards. Give us a call if we haven’t contacted you already.