Market View: December 2021
Yes, it’s that time of year already…
Time to dust off that Mariah Carey single and embrace the joys of finding a car park anywhere that both come with the end of year rush!
After another year of go-stop, the data for the last full month of residential sales is in and they pretty much reflect that “accelerator-brake” feeling.
Melbourne dwelling values increased by 0.6% in November and 2.4% over the previous three months. That’s an annual increase of 16.3%.
So what happened? A lack of available homes in February and March saw home values grow by 2.1% and 2.4% each month at the fastest rate in 30 years.
This made the growth in the following months of between 1-1.8% look modest.
Since then, a record number of properties have hit the market, culminating in the highest number of auctions held across the country since CoreLogic began tracking these things.
Over 4,500 homes went up for auction on the 27th of November, and this massive supply has seen a balancing of house price growth. Basically, we’ve condensed six months of sales into two and everyone needs to catch their breath.
For us at Mason Developments…
November was a real-life experiment in people’s preference for how to buy their home.
While Australian Real Estate has always been obsessed with the auction process, it’s actually one of the few places in the world where homes aren’t bought and sold through private negotiation.
So, what were the results of our experiment? We sold our two homes that were up for private sale in November, whilst our auctions were both passed in.
This probably reflects the market at large and a shift to private sales rather than auctions where people can focus on a property and not be disappointed through the process and allows us to go into the detail of the homes and avoid generic real estate speak.
So, where to from here?
Well, so no one can take these predictions and tell us we were wrong later, he’s a whole lot of other smart people saying what they think according to The Urban Developer:
ANZ said it expects Melbourne’s house prices to lift by a further 7 per cent over the course of next year.
CBA forecasts Melbourne’s property prices to rise by 8 per cent in 2022
NAB is currently forecasting house price growth of around 5 per cent for Australia’s capitals in 2022 (up from 3.6% a month earlier), with apartment price growth likely to be a bit more subdued in Melbourne.
Westpac is expecting Melbourne dwelling values to rise 8 per cent in 2022
Knight Frank outlined in their residential property outlook that well-built homes with a focus on the natural environment and green initiatives will become more and more in demand by buyers in 2022 and anticipate prices to increase by 8%
To put the above into context, that would mean an average 7.2% increase and an increase of $56,182 to the median house price in Melbourne.
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