The Advocates specialises and is experienced in property sourcing inclusive of residential and commercial property for occupancy or Investment throughout Geelong, the Bellarine Peninsula, the Surf Coast and Melbourne. We also offer clients the services of auction bidding, negotiation and vendor advocacy.
I feel the much anticipated rate cut of 25 basis points in February has had a remarkable influence on the property market. It is not so much the $125 a month saving on the average mortgage, it is the mindset that the market could have reached the bottom, there are likely no more rate rises in the wind and the ideal inflationary target range has been satisfied.
Even the worst performing state, Victoria has awoken from its slumber and readying itself for the previously elusive property growth spurt. With four years in the making for many home and business owners the wait was too long and repayments too onerous. If any property buyers are still waiting for the best time to buy property, I feel now is the time. Although there is a large variance between statistics from the REIV, Cotality and Realestate.com, all have agreed that a lift in home values was recorded in the last quarter. Melbourne overall recovered approximately 1% over the past 3 months but in the inner city homes have increased in price by 3.6% and units as high as 5.9%. Disappointingly the median price is still below the heights of the peak in 2022. The market as a whole will continue to rise from now in my opinion and listings will be boosted with renewed confidence from vendors. With the “Liberation Day” and Federal Election blimps behind us I feel there are blue skies ahead. For now anyway.
More economic “experts” are again predicting the future rate cut pattern with the NAB boss and his experienced economist predicting a double rate drop (.50%) and then 4 more cuts to the end of the year. Again, I ask, why make these predictions. Personally I believe 2 cuts following whatever reduction may come in May would be sufficient as any more may well over stimulate the market. Mortgage holders should brace themselves for a maximum 3.1% interest rate until 2026. This would also appease the 30% of the population who rely on high interest rates.
I don’t foresee any great movement with the property market since the election result. First home buyers will be able to purchase a home more freely by only requiring a 5% deposit and avoiding mortgage insurance, and 100,000 new homes are to be completed for new home buyers.
Given migration numbers eclipsed every preceding year last year it only makes sense to cut migration by at least 100,000 per annum. From 2005 to 2024 net migration has risen from $200,000 to 530,000. To revert to a more acceptable level of 250,000 would make sense. International student approvals hit a new high of almost 1.1m (a 25% increase from the pandemic peak). India and China represented the bulk of the migration during 2024.
Regional Victoria is now outperforming Melbourne albeit only by .5% but still significant given the low appreciation levels. Three-quarters of suburbs (72.6%) across regional Australia saw an increase in dwelling values over the quarter whereas almost 50% of capital cities witnessed a decrease over the last quarter in the median house price per suburb.
Michael Ramsay
Principal
The Advocates
HOUSE or APARTMENT
It is the age-old adage that land appreciates in value and buildings depreciate. So you would think that properties with the most land would increase Its worth the most. This is usually the case but not always. Only last month I was engaged to review two very different apartments in Armadale, Melbourne. One was an art deco 2-bedroom renovated apartment in a group of 4 which hadn’t been sold for 10 years. Come auction day it sold for less than the property had been purchased for a decade earlier. The other was a modern recently completed apartment complex of approximately 32 apartments. This one sold for over $600,000 above the reserve and $680,000 above the owner’s purchase price of just shy of $2m 5 years prior. The apartment was secured by way of a competitive private auction.
Houses on the main do increase in value more but I see this gap curtailing over the coming years as downsizes fill the market and demand for quality apartments becomes stronger. Like all property purchases the outcome is very much dependent on location, quality, scarcity, size, floor plan, orientation and views. When you have apartments commanding an asking prices of $37m you would have to think that this property type is closing in on a house of a similar size in regards to capital growth and demand as buyers prefer to live where they work and socialise rather than the traditional wish of an expansive garden. Shoe boxes in high-rises in the suburbs will never be a sound investment however and on the whole, property with land will nearly always reign.
Victorian Statistics
| MEDIAN HOUSE PRICE MELBOURNE | $923,000 |
| MEDIAN UNIT PRICE MELBOURNE | $629,000 |
| MEDIAN PRICE REGIONAL VICTORIA | $598,000 |
| MEDIAN UNIT PRICE REGIONAL VICTORIA | $420,000 |
| AUCTION CLEARANCE RATE | 66% |
| CASH RATE | 4.1% |
| INFLATION RATE | 2.9% |
| RENTAL VACANCY RATE | 2.5% |
From the team at The Advocates
Tip
It is Tip
Following the autumn fall of leaves it is prudent to clear your gutters. Water can build up when it rains heavily if gutters are not cleaned, which can then flow back under the roof line into the property.
If you need to use a ladder and am of a mature age, please consider outsourcing this project.
P.S.
We welcome input to our newsletters so please contact us with any experiences you’d like to share – positive or otherwise! Disclaimer: the information contained in this newsletter is based on personal opinion and experience, it should not be considered professional financial investment advice. Statistics are sourced from the REIV and RP Data