So how did the Melbourne property market do in May?

Date: 3rd June 2020

Topic: Melbourne Property Market 2020

There is no question about it, it has been an unprecedented few weeks, but the Melbourne property market has fared a lot better than many were expecting it to in May.

The overall lack of supply has protected prices to an extent. With the return of open homes and public auctions many buyers are heading back online to search for property. Buyer search activity has increased significantly, up 56% on the low levels we experienced in mid-March. That’s 38% higher than the same time last year. All of this leads us to conclude that buyers are following the wider lift in consumer sentiment and if vendors follow suit, it may be a busy few months for property.

Melbourne buyer activity May 2020

Source: realestate.com.au

The big question is, will this boost of activity translate to a growth in transactions?

The supply of property has remained low since before Easter. The latest 13.7% burst of new listings is a positive sign but is not enough to cover the cornucopia of buyers looking to purchase.
 
With the number of buyers across all levels of property far exceeding supply, vendors need not be hesitant about listing their property for sale. It may even be wise to sell sooner rather than later while prices remain steady and before an influx of spring property hits the market.
 
The supply of property has remained low since before Easter. The latest 13.7% burst of new listings is a positive sign but is not enough to cover the cornucopia of buyers looking to purchase.
 
With the number of buyers across all levels of property far exceeding supply, vendors need not be hesitant about listing their property for sale. It may even be wise to sell sooner rather than later while prices remain steady and before an influx of spring property hits the market.

 

What does the current market mean for sellers?

It’s been quiet in real estate with roughly 1/3rd of normal listings. This low supply has protected local property prices but has led to a bottle neck of demand with enquiries on available properties up 93% YoY (REA).
 
From June 1 we will be welcoming up to 20 buyers at open homes and auctions. We expect many vendors are waiting to assess June clearance rates meaning that there may be an influx of new listings come July and August. The Spring selling season may well start early this year.
 
However a cloud of uncertainty does loom. From what we are reading across multiple sources, it appears there could be a 10% decrease in house prices by September 2020 should unemployment head the way many are expecting. We are 4 months away from Job Keeper being wound back for 3.5 million workers.
 
Here at Frank Gordon, we’re real estate agents, not economists however I think we can all agree that for the short term, the future of house prices will depend on the shape of the economic recovery.
 
Speaking plainly, we know what prices look like right now, we know there are buyers and we know those buyers can access the money they need in order to secure property. What we don’t know, is what the future looks like. This is why we recommend vendors needing to make a change in the next 12 months consider their timing carefully and get in touch for a confidential discussion.