Last week RPM Real Estate Group released their June 2020 quarterly report with some very interesting information on Covids impact on Victorian property.
Two things jumped out at me most. First, the value of loans for investors and owner occupiers is up between 5% and 12% in the last 12 months. Second the median property price for both houses and units is up 8.8% and 5.2%, respectively.
While the market has been trending down (obviously) it has been overall very resilient, performing much better during the last quarter than most economists predicted. One of the most historically accurate economists, Christopher Joye, predicts just a 5% correction followed by a robust cyclical boom after Covid.
Christopher has good reason to make that assumption too, on our blog from 1 June 2020 we showed various historical data sets that prove just how quickly Australian property has bounced back from previous crisis.
Media driven doom and gloom does not = reality.
Another really interesting stat, that comes to no surprise to those within the industry, is that owner occupiers made up 85% of buyers in the June 2020 quarter compared to 71% in the June 2019 quarter. HomeBuilder is the main reason for this but the overall drop in consumer confidence means that most investors have gone with a ‘wait and see’ approach.
As has been widely reported vacancy rates have also increased with the inner/middle ring most adversely affected. This is where the majority of overseas students live and contains a high proportion of AirBnB listings. The Mornington Peninsula and its holiday accommodation has also been affected by the lack of tourism.
The outer residential areas (20kms+) and regional centers have performed much better with vacancy rates still very tight between 1.6% – 2.0%. This may well be a ‘new normal’ of sorts. With more people working from home for at least part of their week, there will be less commuting and more space required within the home. This bodes well for the larger 3 and 4 bedroom homes in lifestyle suburbs in Melbourne’s greenfields and regional areas.
Thanks for reading, if you have any questions or would like more info on any of the above don’t hesitate to contact us directly on info@urbanseed.com.au or 1300 790 509. Stay safe out there.