August 2018 Property Update
By | 26th Aug 18

The government is proposing to make 130 amendments to the Residential Tenancies Act in Victoria in Parliament this week

Melbourne’s clearance rate has stayed consistently in the 60 to 64 per cent range for the last month and our market has definitely found a consistent level. The market is presenting more opportunities for buyers, particularly in the one million plus price range in the inner suburbs. The market has certainly not crashed when we are still seeing some runaway results and consistent results across other areas of the market. 

A house in Victoria Street, St Kilda sold for $326,000 over reserve, a villa unit in Deepdene / Balwyn sold for one million, a house in Kensington sold for $300,000 over reserve and a house in Mount Waverley sold for $202,500 above the reserve. All of those results show that the market is still holding up in Melbourne and we are nowhere near the down-market conditions in Sydney, where the clearance rates are hovering around 40% to 50%. 

Though one of the biggest hand brakes in the market at the moment is financing, as it is getting tougher and tougher for buyers to get finance approved for property purchases.  This is particularly the case for investors that have been smashed by APRA tightening laws in late 2014 and it is not going to get any easier with the Banking Royal commission really making it tougher for home buyers and investors to get finance as they now need to provide proof of their spending.

Westpac has announced that they will no longer finance investor loans for self-managed super funds and it leaves the Commonwealth bank as the only major bank that approves loans for self-managed super funds. Investors are now down to around 27.5% of the market, which is well below peak levels of around 50% prior to APRA tightening the screws in 2014.

The market has also been affected by a decrease in foreign buyer demand and that was a deliberate strategy by the government where they increased taxes as stamp duty and Australian banks no longer lend to foreign buyers. This has caused a slowing in the investor apartment market and is affecting some parts of Melbourne, particularly the eastern/south eastern suburbs. Foreign buyers now account for 9.6% of the market, well down from 17% in 2014.

The government is proposing to make 130 amendments to the Residential Tenancies Act in Victoria in Parliament this week. The REIV and agents and many other property groups are opposing the changes, which will be unbalanced towards tenants with the landlords being very much disadvantaged by these proposed changes.

See the proposed changes below and an online petition that can be signed to oppose these changes;

Petition: 'Rentfair' is unfair

If you would like more information on any of the above information, or would like to discuss your property requirements, please do not hesitate to contact our office on 9883 8900.

Yours in Property,

Frank Valentic

Director, Buyers Agent, Vendors Advocate.