Market Round Up
October to December 2022 Quarterly Market Round Up
Welcome to the Hill & Viteri Property Market round up for the October to December quarter of 2022.
Typically spring is the most active period of the year, as the weather warms up and the days start to get a little longer, and this year was no different.
Throughout the quarter we started to see more buyer activity and more normal conditions with demand for property increasing.
Despite the fact that interest rates continue to rise at a quarter of a percent each month, in the October quarter we saw a minor resurgence in this period. 2022 has seen interest rates rise at a speed that I have not previously seen.
Statistics in the market
From May to December rates were increased 7 times and the official cash rate has increased 3% in that period. This sharp increase by the RBA to the official cash rate was in an effort to manage rising inflation.
So how does this impact the real estate market and property prices. Well, simply put rising interest rate restricts the buyer’s borrowing capacity. This then does not allow them to pay the same price they could previously.
Typically, this results in housing price decline, and that is what we’ve seen in this period. What we have noticed locally is that buyers’ sentiment shifted in this quarter. While some buyers are still making very low offers and feel that prices are falling, there was a good portion of the market that decided to act.
Now the likes of Louis Christopher and Dr Andrew Wilson are still predicting that the interest rates will increase in the first half of 2023. However, it appears that buyers are seeing property at prices that they feel are attractive and are now jumping in. Stock levels through this period stayed fairly consistent despite more property hitting the market.
The rate of absorption saw the demand matching increase supply, despite the rally overall we saw prices continue to come backward but more gently.
Properties sold by Hill & Viteri Property during the October – December
Now I speak very generally about what is happening locally, but there are some specific examples that show you what a sales professional can deliver even when conditions favour buyers.
47 Uranus Road, Padstow
47 Uranus Road, Padstow, sold at Auction on December 3rd.
This property was purhcased 14 months earlier for $1,150,000 in what is considered to be the peak of the market. Buyers having factored in the change were indicating interest at $1 million, which is about 13% less than what the property was purchased for. This property sold under the hammer at Auction for $1,150,000 after the bidding had stalled at $1,080,000.
The agent convincing the buyer to bid against themselves. Then using the vendor bid to negotiate the price back to what it was originally purchased for, 14 months earlier. This then enabled the sellers to go out and buy at the new market price in a more desirable location. This was a huge win on their change over figure.
2 Alice Street, Jannali
2 Alice Street, Jannali sold at Auction for $1,060,000, now the vendor had some troubles selling this in the middle of the year. Our team project managed a renovation to make the property more salable which resulted in a sale at Auction just prior to Christmas. There were 7 bidders who registered and competed for this post war cottage. In the Auction space Michael Virley from MVP Auctions recorded a clearance rate for the quarter of 68%, this is up from 58% in the previous quarter. Michael reported an average of 4.2 bidder registrations for each Auction in the period, which was slightly up on the previous quarter. Interestingly though 27% of properties sold prior to Auction in this period. In the Strata Market, particularly apartments, we saw good activity from first home buyers and an increase in investor activity.
Derin Hill sold 1/16-26 Park Street, Sutherland for $695,000. This 2 bedroom, one bathroom and single garage apartment was sold significantly higher than we expected.
Simmarly, 10/13-21 Oxford Street, Sutherland sold in less than 2 weeks, for $730,000. This 2 bedroom apartment was professionally staged and had a side by side garage.
So whilst there was a resurgent of sorts in this quarter I would say that we are in a normal balanced market.
Property Management – Market Round up for the quarter October – December 2022
Now in regards to the rental market our Head of Property Management and Partner Leigh Anderson advises that demand is still quite strong. Especially for houses in the $800 – $1000 range, he also noticed that demand for two bedroom apartments notably increased in the quarter.
Leigh advised that this was the teams biggest ever leasing month, with 28 properties leased in December. Leigh also mentioned that new legislation came into affect regarding rent bidding and should you have any questions on these changes he is more than happy to have a chat with you.
If you would like to know the new sale or rental value of your property give the team a call on 9545 2220 or contact us via the website.
I’d like to thank you for taking the time to watch our quarterly Market round up and as always if you have any questions or require any real estate assistance please don’t hesitate to contact the team.