7th October, 2019
Last week the Reserve Bank of Australia announced it would cut the cash rate to a record low of 0.75% reducing the cost of borrowing for the third time in five months stimulating the economy.
Increased affordability is also good news for potential sellers as this increases the pool of buyers for property. Particularly in the current market where we are experiencing lower-than-average supply.
Adding to demand, new domestic building approvals have fallen to a 6 year low restricting future supply. As buyers consider off-the-plan apartments with a touch of caution, we expect a growth effect for established apartments and townhouses.
This was evident in our auction of 20/6 Graham Street, Port Melbourne last weekend. After rapid bidding from four bidders, this one-bedroom apartment was sold under the hammer for $600,000.
In summary, over the last four months we’ve seen the market rebound despite negative signposts in the economy. The governments counter measures bode well for a stronger property market.
Here at Frank Gordon we are looking towards the sunnier months with growing optimism. With some exciting properties about to hit the market it appears that vendors are starting to feel more confident with the market conditions.
This pep in the market suits sellers who plan to exit by Christmas. Melbourne dwelling values grew 3.4% over the last 3 months (Core Logic), way stronger than forecasters predicted. All in all it seems that Melbourne house prices may be headed back to where they were in 2017 sooner than expected, barring any major global or local economic setbacks.