When the gunsmoke of battle finally cleared what was billed as the “Climate Election”, turned out to have been a “Franking Credits Election” all along, and Bill Shorten was ridden out of town on a rail. We make no comment on the outcome of the election other than to observe the real estate market has taken it well. Property values across Melbourne and Sydney have lifted for the first time since 2017. In the quarter just gone, Melbourne's inner east, Abercromby’s backyard underwent a 2.7 per cent lift in prices, the highest in the country. This isn’t entirely due to the Coalition victory, but neither is it unrelated to it. Stability of government, and the termination of the threat to negative gearing and capital gains tax discounts, has created confidence in the market.
The RBA, in order to stimulate investment and lower unemployment, has cut the cash rate to a once-in-a-lifetime 1%. That’s as close to the mythical “Free-Money” as you will ever get. This, combined with the Opposition acceding to the Federal Government’s tax cuts, will see the market gain further strength, with the top end of Melbourne’s housing market leading the movement.
Though mortgage lending from the banks remains harder than it was before the banking Royal Commission, we anticipate large numbers of prospective homebuyers will enter the real estate market as a reaction to APRA recently removing the shackles from lenders, allowing borrowers to super-size their loans. Many experts believe this will reignite the housing market.
The positive reaction to the result on May 18 has seen high clearance rates of 70% at auctions since, and this has resulted in low stock levels. Our advice is; if you are thinking of selling in 2019, act now while stock levels are low and buyer sentiment is strong.
The media’s recent predictions of wrack and ruin in real estate have been proven wrong. All indications are the cycle has bottomed out and is starting, albeit tentatively, an upswing.
With interest rates virtually non-existent, buyer confidence on the up, and the election and its fears behind us, more people are applying for home loans, there is higher traffic at open-for-inspections, and auction clearance rates are heading in a positive direction. It will be interesting to see how the market reacts to Spring. But stock levels will determine how positive the market continues to be.
To find out more about the properties on offer or if you’re looking to sell or buy quietly and discreetly, contact one of the ABERCROMBY’S team on 9864 5300.