You have to immerse yourself in a world to be able to tell its story properly. Lately you’d almost think journalists were cherry picking spooked individuals to interview so they could ramp up alarmism and “sell papers”. We in the real estate world often feel the media are reporting on, or speculating about, a different reality than the one we live.
2023 has started strongly with a number of very impressive sales. New buyers are increasingly entering the market place. But the constant, incremental, interest rate rises are causing cautious buyers to hesitate, waiting for certainty and for the future to be entirely predictable so their budgets might be set in stone. But a certain future is a fond hope that never was, nor will be, a reality. It might be that if the RBA rolled these tiny, death-by-a-thousand-cuts, increases to the money rate into larger less frequent rises the media wouldn’t be able to make the market so psychologically skittish.
The positive news is that the RBA only last month opined that the worst of this inflationary era is over, done, a diminishing factor. “Inflation is likely to have peaked around the end of 2022, and is forecast to return to the target range over coming years,” its statement said. Inflation peaked at 7.8 percent and the RBA predicts that figure to decline to 4.75 percent this year and to go lower to 3 percent in coming years. Which will be an end to rate rises and a reversal of recent trends in the real estate market. On the first day of autumn The Australian conjectured that the market has bottomed out.
On the other hand, vacancy rates for rental properties in Melbourne are at historic lows, at only 1.4 percent, meaning rents are rising to historic highs, not only through scarcity but because owners have increased charges to meet the financial pressure of changing interest rates and increasing mortgage repayments. Long queues can be seen at Open for Inspections.
A frustrating time for renters, but a good time to buy or own a rental property, with rental prices much increased from a year ago. With the start of every year relocations for employment reasons mean fresh rental demand. Added to that, international students returning to Australia have ensured the rental market is going to remain a landlord’s delight.
Being near a well-regarded school has become one of the main priorities for renters, so investors looking to purchase a rental property would do well to pay close attention to school catchment zones. A prestigious and esteemed school nearby will strengthen property prices now more than ever.
Good townhouses, high-end houses, and impressive apartments are in great demand for rental currently, so if you have a property in these categories you’re considering renting, our experienced Property Management team will do so swiftly and for the market’s top return.