Reserve Bank rate cut to underpin growth in Melbourne

Melbourne housing market remains solid in latest quarter; rate cut to underpin growth


The Reserve Bank today reduced the cash rate by 25 basis points to 2.25 per cent, the lowest level since the 1950’s. Interest rates had been on hold for the past 17 months which provided a solid platform for the property market across Melbourne and Victoria.

The national rate of inflation is currently at 1.7 per cent – well below the RBA inflation target of 2-3 per cent – which indicates an accommodative environment for continued low interest rates.

Melbourne’s housing market remained solid in the final quarter of last year, with the city’s median house price of $669,000 up five per cent on the September quarter. Prices increased in inner, middle and outer suburbs.

Supportive information source: REIV Monthly Research Bulletin – published February 2015

BUYER’S ADVOCACY

For Buyer’s Advocacy Services in Melbourne – Master Advocates have the answers you need:

Whether you’re an investor or someone looking for that family home – buying property needs careful consideration.

At Master Advocates, we are your buyer advocacy experts and we are happy to answer any of your questions.

Are buyer’s advocacy fees tax-deductible?

A buyer’s agent’s fee is treated as a capital expense, which means it is deductible to you at the point of selling your property. Master Advocates specialise in issues about buyer’s advocacy and we are not qualified accountants, so we recommend that you speak to your own accounting expert to better understand you own individual financial situation.

Is buying at auction the best way to buy a property?

Generally speaking – no. Auctions inspire a lot of competition that is aimed at pushing the price up. Efficient negotiation through other sale methods is usually better for the incoming buyer and with Master Advocates looking after that for you, you know you are getting the best possible price.

Category: General
Posted by: Mark

Market Overview

In 2014 this low interest rate level enabled the market to withstand the

impact of moderating consumer confidence and to grow at a consistent

rate.

The auction market experienced a strong last quarter in 2014, with two

record auction weekends and approximately 41 per cent more auctions

compared to the September Quarter 2014. There were over 13,400

auctions held over the quarter and around 3,500 auctions held during

the month of December 2014. More than 40,000 auctions were held in

2014, well ahead of 2013 when 35,000 auctions were held.

The average clearance rate in December 2014 was 67 per cent, which

is the same level as a year earlier. While the clearance rate fell slightly

in the final two months of 2014, it is still a solid result given the high

number of auctions in November and December.

Median house prices in Metro Melbourne grew 5.3 per cent over the

December Quarter 2014, which was reflected in the overall increase

of the HPI over the quarter. The REIV House Price Index (HPI) for

Melbourne increased by 0.8 per cent to 170.1 from 168.8 in December

2014. Owing to the record auction weekends in October and November,

the index increased significantly over the December Quarter. The REIV

Unit Price Index (UPI) for Melbourne also rose by 0.4 per cent in January

2015 to 151.8. The HPI for Regional Victoria decreased 0.4 per cent in

January 2015, for the first time in six months.

The REIV Property Market Sentiment Index (PMSI) fell by 2.7 per cent

over January 2015, having increased sharply over the previous month.

This was a result of dampened sentiment for sales volumes and listings.

On the other hand, consumer sentiment in Victoria has improved

slightly by 0.7 per cent during the month, however, it continues to track

below expectations.

The vacancy rate in Melbourne tightened to 3.1 per cent over January

2015 from 3.2 per cent in the previous month. Vacancy rates in the

inner suburbs decreased the most, falling to 3.1 per cent from 3.3 per

cent in December 2014.

HPI Growth

The REIV House

Price Index (HPI) for

Melbourne increased

by 0.8 per cent to

170.1 in January 2014.

The index is currently

12.0 per cent higher

than its value a year

ago.


Clearance Rate

The average clearance

rate in December

2014 was 67 per cent,

which is at the same

level as December

2013.

This is still a strong

result for the auction

market given the high

number of auctions

held in the month.


Auctions Held

The auction market

remained strong in

December 2014 with

over 3,500 auctions

held, closing a big

year for auctions in

Melbourne.


Days on Market

The median number

of days on market

for private sales

increased to 41 days

in January 2014, after

being stable at 39

days in December

2014.


Vacancy Rate

The vacancy rate in

Melbourne tightened

to 3.1 per cent over

January 2015 from

3.2 per cent in the

previous month.

Over the same period,

vacancy rates in

Regional Victoria

remained stable at 2.2

per cent.


Market Sentiment

The REIV Property

Market Sentiment

Index (PMSI) fell by

2.7 per cent over

January 2015, having

increased sharply

over the previous

month. This was

mainly a result of

lower expectations

on new listings,

which corrected after

a sharp increase in

December 2014.

Start typing and press Enter to search