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Market View: April 2019

Was that the bottom?

As keen market monitors, we felt like we’ve been noticing a bit of a change in the last two months in the Melbourne market.

Coming off a low of 40% clearance rates in November 2018, we’ve noticed clearance rates up 15% since that low and an up-tick of roughly 5% in the first two weeks of April.

Although not a great indicator of transactions and one figure doesn’t always tell the same story for the forty or so sub-markets in the Melbourne residential space, clearance rates are an easy and quick gauge of market confidence. And that confidence seems to be rising, slowly.

With the federal election due in May, we expect the market in Melbourne to quieten down in both clearance rates and number of properties for sale in the lead-up to the Poll. Once the winner has been declared and the confetti swept clean from the celebrations at the afterparty, we expect a build-up of activity.

This year the federal election has added importance with Labor’s proposed changes to capital gains tax and negative gearing. The start date for these changes has been set to 1 January, 2020 should Labor win power meaning that investors will have around 6 months to acquire investments under the old regime.

If the Liberal National party win, the current investment rules, including taxation, will remain largely unchanged.

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