Property Market Update 24th & 25th October
By | 26th Oct 15

Melbourne Property Market update

The clearance rate dipped to 71 per cent, compared to 73 per cent last weekend, which was the lowest since February due to the high volume of 1600 auctions this weekend. This large number was due to this week’s Melbourne Cup weekend. The REIV state the market was still strong despite the interest rate rises of the big banks and the clearance rate dip was just due to the extra stock. This weekend the REIV is expecting 550 auctions which is the highest ever for any Melbourne Cup Day weekend and more than double the number of auctions held last year. (source REIV).

We expect the demand for family homes will stay strong with families continuing to battle it out at auctions and driving up prices. Emotion will also start to play a large part in the decision process as families trying to move into their new homes by Christmas don't have many weekends left to secure a property.

ANZ and the NAB have now joined Westpac and the Commonwealth Bank in raising their interest rates which could see many homeowners paying an extra $27 to $46 in monthly repayments.  The four big banks are now out of step with the RBA but many believe that official rates may be cut on Cup Day to counterbalance the bank's moves; however this does not mean the banks will pass on the full cut to its customers. 

For those that remember 18% interest rates in the early 1990s, this rise is small but for many new home owners and investors that are new to being mortgage holders and are highly geared, the small rise may be a concern. It is always important when borrowing to make sure you take into account interest rate rises and factor this in to your budget.  Rates have been historically low and we can't expect this environment to last forever, so people need to be prepared when rates move up again.

I was quoted in an article in the Herald Sun over the weekend regarding putting an offer in prior to auction, when to use this tactic and the best way to do so. Whilst there are certainly risks involved with this strategy we have also achieved great results with this strategy. Some of the risks are over paying or showing all your cards to the vendor however it can also work in your favour if you have done your market research and stick to your budget. Whilst bidding at auction is transparent as you can see the competition, it is designed to work on people’s emotions and to push the price up. A pre-auction offer can remove that competition, however there is no point going in with a low offer. You need to do your research and present a strong offer in writing to get the agent and vendor to consider selling prior to auction. To read this full article, click here.

It was great to be on The Block this week to score all the apartments with our Buyer's Advocate jury and state our views that are often quite different to those of the styling judges. The apartments are definitely in a different league to past blocks with those incredible views and largest floor space ever.