Economists are predicting that owner-occupiers and young buyers entering the property market for the first time are set to dominate auctions across Victoria over the coming months.
According to ME Bank’s Patrick Nolan, first homebuyers are taking advantage of the stamp duty cuts that have been introduced across the state, while also facing less competition from investors.
“This season will be different from previous years in that we won’t see as much investor activity due to Australian Prudential Regulation Authority regulations curbing the amount of investor and interest-only loans banks can lend,” Mr Nolan said.
“We think there’s going to be much more opportunity for owner-occupiers to really get in there and compete.”
However, the strongest areas in Melbourne’s auction market are still in the budget price range.
Experts are keeping a close eye on how well the auction market performs over the next few months, as spring is typically the best time of year to sell property. Traditionally, some of the biggest auction days in Victoria are the weekends before the AFL grand final and the Melbourne Cup. On these ‘super Saturdays’, it’s not unusual for roughly 1400 properties to face the hammer.
According to the Real Estate Institute of Victoria, middle and outer ring suburbs in Melbourne have recorded heightened auction activity, which is expected to continue well into spring.
Above average clearance rates have been experienced in Craigieburn, Reservoir, Dingley Village and Scoresby, among others. This is a major shift from previous years when auctions have been most popular in inner city, wealthier areas. It’s believed that an increase in buyer appetite has made properties further afield easier to sell under the hammer, as well as through traditional selling techniques.
This spike in outer suburbs auctions has also been seen in the outer west, where Samantha McCarthy from Hocking Stuart Werribee says there’s an average of five bidders per property. It’s also becoming the norm for first homebuyers to be bidding against each other, as well as competing with interstate investors. A lot oft these investors seem to be coming from Sydney, as Melbourne’s property market is still much cheaper than New South Wales’ is.
With this current boom, Melbourne has emerged as the strongest auction market in the country, experiencing clearance rates that are higher than Sydney.
It’s also expected that the clearance rate in Melbourne will remain at a steady 70 per cent over the next few months.
To make the most of Victoria’s booming auction market, talk to Complete Financial Services about your home loan needs today!