We’re excited to welcome in a new year, and we hope this one will be better for all, especially Melbournians!
In terms of property, however, it will be hard to outdo the results of last year. The latest data at the time of writing from CoreLogic showed growth in most capital cities had slowed, but the price gain over the past year for Melbourne has exceeded 16 per cent, while property values in regional Victoria have risen by a huge 24%. No homeowner is going to scoff at that! See our ‘Expert Insight’ below for our thoughts on what is to come this year.
In not so great news, we have seen the Windfall Gains Tax passed by the Victorian Government, despite opposition from industry bodies. The tax will apply to large windfall gains that come from planning decisions to rezone land, with the total value uplift to be taxed at 50% for windfalls above $500,000. With such substantial increases to prices this year, affordability is a real issue, and will only be exacerbated by this new tax, which is the 19th new or increased property tax since the Andrews Labor Government was elected.
Over the past month we have seen the Victorian Government ease some vaccination requirements, including in real estate settings. We look forward to seeing all or any of you at open homes, auctions and in our offices.
CHRISTMAS CLOSURE: Please note, while we have continued to be available for deals currently in progress over the holiday period, our office will officially be open again on January 10.
If you need expert advice or help – whether you’re buying or selling - Property Mavens is here to guide you through the property market. To talk to a qualified and highly-regarded buyers’ agent or sellers’ advocate, contact us today.
What can we expect from property in 2022?
There will be challenges in 2022, but we expect the Melbourne property market to perform reasonably well.
There has been a slowdown in growth rates at the end of this year, which is likely being triggered by affordability constraints, and the higher levels of new listings being added to the market in recent weeks.
We’re not predicting runaway growth in prices in 2022, with growth rates likely to be lower than 2021, but the future looks promising for the buyers of well-positioned property with the right attributes.
There are some fundamentals to look out for in 2022, as they will impact upon Melbourne’s property market and its performance:
• Interest rates – These will remain low, but there will likely be one or two hikes of 0.25% over the coming year. Rising rates may temper the market somewhat, but it will take several hikes to slow activity.
• Regulatory intervention - APRA recently tightened lending restrictions to ensure borrowers could withstand a rise in interest rates, pushing the borrowing comfort margin to 3% above current interest rates, up from 2%. History tells us APRA is likely to make multiple interventions.
• Resumption of immigration – The shutdown of immigration into Australia during COVID has impacted property price growth in Melbourne. There are signs immigration will rebound in 2022, but it’s unlikely to get to its previous highs for several years. There tends to be a lag between higher immigration and the impact on demand in the property market, but we do expect the impact of new arrivals to be positively felt in the Melbourne property market over 2022, but at a lesser rate than before the pandemic.
• Supply - To date, the reduction is supply of properties for sale broadly matches the reduction in demand from lower immigration.
• Economic factors – Looking through the quarterly statistics to the annual results, the economic floor underneath the property market is mostly good, but struggling in some areas. We expect the economy to be in reasonable shape in the first half of 2021, but carrying a few handicaps. It is still vulnerable to external shocks and we haven’t yet seen the impact of the withdrawal of historically large government stimulus programs.
To find out more about our thoughts on the market in 2021 and what’s ahead in 2022, you can read our Market Review 2021. Link here.
To listen to a recent panel discussion reviewing 2021 and looking ahead to 2022 with Miriam and other property experts, click here.
An experienced and expert buyers’ agent such as Property Mavens can provide advice and help buyers and sellers to navigate any market and choose the right property. If you are a buyer or seller that needs assistance, contact us today for an obligation-free discussion.
2021 in Review and Where To For 2022
Miriam, Terry and a Panel of Property Experts discussed;
The year just ending has been one of the most remarkable ever in Australian real estate.
It has produced outcomes which defied the doomsayers, with price growth that exceeded everyone's expectations.
And now our thoughts turn to 2022: what can we expect of the year ahead?
Will property prices continue to rise? And, if so, will the growth levels match those of 2021?
Will interest rates rise and does it matter anyway?
Will the re-opening of international borders and an influx of overseas migrants create a second wave of buyer demand? Watch the video replay here
Why do you need a buyer's agent?
Joanna wanted to purchase her first home around the inner metro Melbourne area, but being a first homebuyer, she was unsure of where and what to buy. Not understanding how properties were priced and finding it hard to keep up with prices in a moving market, as well as being conflicted with the information provided to her by sales agents, Joanna decided to engage our Melbourne buyers’ agent services to help.
Joanna had a specific brief to purchase a property in the inner Melbourne suburbs. At the time, quality properties were attracting a lot of attention, with the competition seeing them sell above their advertised price range.
Despite this, Property Mavens was able to identify a unique 2-bedroom, 1-bathroom South Yarra townhouse matching Joanna’s specific brief, and negotiated our “Special Conditions” into the auction contract. We then secured the property at auction for well under the anticipated market value.
If you want help to identify an investment-grade property like this one, whether it’s a family home or an investment property, click here to book a time with us to discuss your requirements. It’s 100% obligation-free.
Why do you need a vendor's advocate?
Vendor Advocacy advice to support and guide her throughout her sales journey.
After Property Mavens’ determined which three agents best suited her needs, Cindy selected her preferred agent and the sales and marketing process began with gusto!
The result was a top of the quote range price, much to Cindy’s delight, with the property selling prior to a scheduled auction.
As professional property buyers and vendors advocates, we know the difference between a bad selling agent and a great one.
If you would like help to secure a fantastic outcome like this one, whether it’s selling a family home or an investment property, and you’re ready to get started, click here to book a time to discuss your requirements. It’s 100% obligation free.
Being fairly new to Melbourne, Saurav and Paridhi needed guidance to purchase their first home for their family in the city, so they engaged Property Mavens’ services as a metro buyers’ agent to find, assess and negotiate on their behalf.
In a fast-rising and competitive market due to strong demand during COVID-19, Saurav and Paridhi wanted to purchase a low-maintenance first home. We were able to successfully purchase this fantastic property for them, a 4-bedroom, 3-bathroom townhouse in Rosanna immediately after the Stage 4 lockdown in Melbourne in the last quarter of 2020.
We purchased the property on our clients’ behalf via a private sale for $32,000 below the property valuation, which was also under Saurav and Paridhi’s budget. Given it was bought for a great price significantly under the valuation, the couple saw an immediate equity gain, and the value of their home has continued to rise.
They paid $968,000 for their home in October 2020 and one year later it was valued at $1,250,000, equating to 29% capital growth in just 12 months!
As professional property buyers we know the difference between a bad property and a good one, where to buy to generate the strongest returns, how to buy to secure the best result, and what properties are really worth, to ensure our clients don’t pay too much. If you want similar results, click here to book a time with us to discuss your requirements. It’s 100% obligation free.
Go Forth and Prosper !
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If you want to invest or buy the right home for your budget, or sell your property click here to book a time, or call us for a chat about securing your financial independence.
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At Property Mavens we choose to give back to help create social change within our business model. If you use our buyers or vendor advocacy services, you will be helping to make a positive impact within the local and wider community.