As we stated last month the year has started strongly with increased buyer enquiry, well attended opens and strong results for properties that sold in January.
This month started off in a similar vein with the first auction weekend of the month showing some strong results with clearance rates well above 70%. The market passed its first real test above 1,000 auctions on the 18th February with a clearance rate of 79% based on the reported auctions to the REIV.
While these numbers are encouraging, we are starting to see buyer depth now starting to weaken. With listings increasing buyers are now spread thinner across mulitiple options and if the property is compromised in any way it is sitting for longer. The enthusiasm at the start of the year is waning and buyers are becoming more discerning as the supply increases. There may also be more buyers now waiting to see if interest rates fall. The commentary by the RBA after the last interest rate decision may have weighed upon buyers as future increases were not ruled out.
We still expect 2024 to be a good year for real estate but it may be a bumpier ride than first anticipated. We will certainly know more on the direction and sentiment of the market in March and April.
This month we provide our regular insights from corelogic, a property management update, some recent purchases and our tip on what buyers were looking for in 2023.
We hope you have a great March!
Insights
Source: Corelogic 2024
CoreLogic’s research director, Tim Lawless, identified Perth as a stand out among the capital cities for a persistently rapid rate of capital gains. “Perth home values rose a further 1.6% in January, on par with the city’s growth trend in November and December and only slightly lower than the recent high of 1.8% recorded in October.
The western capital continues to see housing demand outweigh supply, helping to push values 16.7% higher over the past 12 months. Despite that, housing prices remain relatively affordable compared with most capital cities, with the median dwelling value sitting just under $677,000.”
Other highlights from the January Housing Chart Pack include:
- The value of residential real estate was an estimated $10.3 trillion at the end of January, which was relatively steady on the previous month.
- Regional dwelling values are now rising at a faster pace compared to the capitals, increasing 1.2% compared to 1.0% in the combined capital city market.
- Perth led capital growth performance in the greater capital city markets. In the year to January, Perth home values increased 16.7%. Perth dwellings also had the strongest quarterly growth of the capital city dwelling markets, rising 4.9%.
- CoreLogic estimates there were 28,917 sales in January taking the national annual count to 499,162. This is roughly in line with the numbers seen over the year to January 2023 (496,926) and 3.6% above the average annual volumes seen over the previous 5 years.
- The time it takes to sell a home continued to trend higher in January, thanks in part to the seasonal slowdown in sales activity. Over the three months to January, the median selling time for a capital city dwelling was 29 days, while the median selling time in regional Australia was 44 days.
- The 2024 auction market started strong, with the combined capitals clearance rate shifting significantly higher compared to the final weeks of 2023, when the clearance rate fell below 60%.
- Australian rent values increased a further 0.8% over the month of January up from the 0.6% increase recorded in December. This uptick has seen annual growth in rent values accelerate slightly, from the 8.1% lift seen over the year to October 2023, to 8.3% in January.
- Dwelling approvals dipped -9.5% in December. This was driven by a -22.4% decline in the more volatile unit segment, while house approvals were relatively stable, dropping just -0.6%. While Approvals had trended a little higher through 2023, monthly approvals remain well below the previous decade average.
Source: Core Logic
Property Management Update
Australian rent values increased a further 0.8% over the month of January up from the 0.6% increase recorded in December. This uptick has seen annual growth in rent values accelerate slightly, from the 8.1% lift seen over the year to October 2023, to 8.3% in January.
Gross rent yields inched higher 2 basis points higher to 3.73% in January, with monthly increases in rents outpacing increases in housing values.
Buyers Advocate Property Management Experience
It has been a fast-paced start to the year in our Property Management department.
With the rental shortage situation still lurking, each property that we list for rent has many potential renters visit and apply. Majority of our properties are leasing after 1 open home. We have new renters signed up and ready to move in once the vacating renter has left. For us it feels a lot like pre Covid times.
Our team receives calls from interested parties who want to know what they can do to get their foot in the door, how can they make their application stand out from the others.
January is generally a busy time of the year due to migration into the country, increased travel interstate and university recommencing but we see this fast-paced start to the year continuing through to April and possibly beyond.
There was an 18.8% rise in the new property listings nationwide since the same time last year, however demand still significantly outweighing supply with the seeker to lister ratio.
COMPLIANCE / SAFETY CHECKS
While Victoria has some of the strongest rental laws in the nation, it is important to note that having safety checks done at your investment property is not optional, RRP’s / Agents must be able to provide evidence that these checks are being carried out.
Buyers Advocate engage Detector Inspector to carry out the safety checks at each property. Gas and Electrical safety checks are done every 2 years and smoke alarms done every year. All checks are done, and reports sent to us. These reports can be accessed via the Detector Inspector portal at any time, they include detailed information as well as photos and any recommendations / works to be completed.
Property Management Tip for Residential Rental Providers
Landlord Insurance is something that we highly recommend every landlord / RRP have in place. We recommend the following insurance providers. If you do not have this cover, please reach out to one of the below providers and arrange this immediately:-
- EBM RENT COVER – 1800 661 662
- TERRI SCHEER INSURANCE – 1800 804 016
- PROPERTY INSURANCE PLUS – 1300 307 072
Property Management Tip for Renters
When applying for a property, ensure that your application is complete and that when possible you have advised your references to expect contact (including rental references & employment references). Try to put your application in as soon as you have finished viewing the property as the processing / checking of your application starts the minute you submit it.
Buyers Advocate Property Management USP
Buyers Advocate Property Management provide a boutique service which translates to the highest possible standards of customer service and support.
We invest heavily in our relationships with our rental providers, renters and external trades. This level of care and attention allows us to attract and retain the best quality renters to look after each investment property and to maximise the rental return.
All our properties rent within a short period of time, have zero arrears, an average rental period of over 2 years and a high satisfaction rating from both rental providers and renters.
We are able to provide this level of service as we have a very neat, high-quality portfolio. This is managed by 2 full time property managers and a staff member supporting them with open homes and trust accounting. All staff have significant industry experience and have been with Buyers Advocate for many years. So all our clients benefit from the low turnover and consistency of communication.
If you feel that you may benefit from our boutique property management service, please give us a call on 03) 9818 4499 to have a confidential chat. It may be time for a change.
Property Purchases
We have had some great results for our clients in 2024.
Here are a few purchases below:
Home Buyer – Kew
This was a great purchase for a lovely family looking to get a foothold in Kew. Plenty of research and buyer analysis went into this purchase. Securing it at auction for a price below what was offered by another party prior. A great result.
Investor – Balaclava
Doing things from afar; our client was based abroad and was relying on solid communication and a sound knowledge of the apartment market, in Melbourne. After scouring the market and knocking various apartments off due to their attributes, Buyers Advocate found the perfect ‘turn-key’ apartment. Having sound market knowledge, Buyers Advocate knew this property had recently been sold with the sale falling through. We also knew that the price achieved was nowhere near the top end of the selling agents estimated selling range and that the Vendors were pretty keen to get a deal done. Within a few days the due diligence was done and the property was secured.
Home Buyer – Tecoma
Coming back to Buyers Advocate for the third time with their property requirements, our clients wanted a lifestyle home in the outer East, that was within walking distance to a train station.
After looking at three properties with them, to understand their requirements, Buyers Advocate looked at one more home and matched it to them. They had fallen in love with the home. Buyers Advocate knew there would be competition from other buyers. We made our offer to purchase only for it to be countered by another buyer. The selling agent was then going to just keep coming back to both of us until one party stopped. It’s negotiations like this that the buyers are blind. Asking the right questions of the selling agent, gets a better outcome. Buyers Advocate stopped the selling agents offer process and secured the home well within budget. Another deal done and another happy client.
Vendor Advocacy Service
Did you know we offer a vendor advocacy service to assist clients achieve the best result in selling their home. The service facilitates the sale of your property in conjunction with a sales agency. All fees, sales methods, and campaign are negotiated in consultation with you.
Starting with independent advice on the property value, we will also;
- Help select only the most competent, senior and professional agency team to represent you
- Advise on the different methods of sale and marketing campaign
- Advise on any offers that are received and also attend the auction whilst the selling agent conducts the auction
- At all times provide you with complete independent advice and manage the campaign with the upmost professionalism
Once the campaign is underway Buyers Advocate will assist with the communications with the agent and provide a sounding board for any questions or issues you may have during the campaign.
Tip Of The Month:
What do buyers look for?
This month we focus on the top 20 search items in 2023 for Victoria. The following article is an extract of an article published by realestate.com.au.
What words do you have in mind when you’re searching for your next home?
New research from PropTrack has revealed the top 20 words that Aussie property seekers search for when looking online for a home to purchase, which could add as much as $100k of value to your home.
One of these words could actually make the difference between a home everyone wants and is widely searched for, and the properties that get overlooked.
Pools topped the search terms Victorians keyed in at realestate.com.au last year, with garages, courtyards and balconies also featuring on the list compiled by PropTrack.
Victorian homebuyers most-searched terms, 2023:
1. swimming pool
2. garage
3. courtyard
4. balcony
5. study
6. outdoor area
7. shed
8. warehouse
9. mortgagee
10. unit
11. beach
12. ensuite
13. art deco
14. view
15. double storey
16. granny flat
17. church
18. ground floor
19. tennis court
20. air-conditioning
So if your property has any of these features it is likely to appeal to buyers.
