Discounts and days on market drop in Melbourne pointing to property market recovery
Discounts and days on market drop in Melbourne pointing to property market recovery
Houses and apartments in Melbourne’s inner-city suburbs are listed for fewer days and are not being discounted by as much as they were a year ago, new data shows.
After months of being locked down because of the coronavirus pandemic, the property market is now showing the early signs of recovery, though prices remain flat across the city.
For buyers, flatter prices and fewer discounts mean they do not have to rush to the market to buy, and have more time to look for the perfect property, Domain senior research analyst Nicola Powell says.
Vendors on the other hand, need to be mindful of how they are pricing their properties for sale to meet buyer expectations and successfully sell.
“At the moment, buyers have a little bit more time and can make the right decision and wait for the right home,” Dr Powell says. “But, if we were in a rapidly rising market I would have very different advice.”
Inner suburbs including the ritzy inner-south region’s Brighton, Hampton and Sandringham saw the days on market – or the time a house is listed via private treaty for sale – fall from 73 days in November last year to 68 last month.
Days on market also dropped for apartments – from 84 days to 72 – over the same time period, the Domain data showed.
The amount prices were being discounted on units and houses listed in these expensive beachside suburbs also tumbled from 5.1 per cent last year, to 3.9 per cent in November.
This equated to a smaller discount of $54,756 off the median house price of $1,404,000 in the inner south.
But it’s not all positive news for inner Melbourne. The data showed that while the amount listings were being discounted was falling, a higher proportion of them were being discounted.
In the inner south, the number of listings discounted jumped from 4.2 per cent last year, to 16.8 per cent in November, seeing it record the biggest leap in numbers in Melbourne.
Kay & Burton South Yarra partner Michael Armstrong says luxury apartments and townhouses had struggled more than homes through the pandemic, as downsizers who would normally move on decided to stay put.
House sales were now booming, with those looking for the ultimate family home with all the things they needed to survive another lockdown becoming very popular.
“I think family homes have been the strongest part of the market this year,” Mr Armstrong says.
Though prices had been discounted, it wouldn’t last for long as Melbourne’s market kicked back into action, he says.
“When we re-opened after lockdown [in October] there was a noticeable gap between where buyers were and where vendors were,” Mr Armstrong says. “Since the start of November, that gap has definitely started to narrow.”
The inner region, which includes the CBD and Brunswick, also saw the number of days apartments are on the market fall significantly from 103 to 89 over the year to November, despite a lack of international students.
First-home buyers wanting to live in the inner city were also boosting sales numbers, seeing days on market there fall over the year to November.
“First-home buyers and owner occupiers are a key source of buyers,” McGrath Brunswick principal Michael Chan says. “We’ve also had an influx of people from regional Victoria looking to buy for their kids who are starting university.”
The improvement in some of the inner-city regions are yet to reach Melbourne’s outer fringe where days on market, discounts and the number of discounts on all listings rose, data shows.
In the west region, which includes the first-home buyer stronghold of Werribee, days on market for houses rose by 10 days – from 86 to 96 – over the year to November.
Discount amounts also grew from 1.7 per cent in November last year, to 3.3 per cent this year in the west, equalling a discount of $19,965 from the median house price of $605,000 across the region.
The proportion of all listings discounted in the west also jumped to 11.5 per cent, up from 5 per cent just a year ago.
First National Westwood director and auctioneer Rob Westwood says property prices in areas such as Werribee in Melbourne’s west aare now mostly being discounted where they were priced just over $600,000, in order to attract first-home buyers.
It meant they could still benefit from the first-home buyer grants and stamp duty discounts on offer, he says.
“The market is changing at the moment, we’re definitely seeing with the first-home buyer grant that there are plenty of buyers. Anything in the right price range under $600,000 is now selling within 10 days,” he says.
Ref: MELISSA HEAGNEY , SENIOR JOURNALIST (on 17 Dec 2020). Discounts and days on market drop in Melbourne pointing to property market recovery. Retrieved from https://www.domain.com.au/news/discounts-and-days-on-market-drop-in-melbourne-pointing-to-property-market-recovery-1015455/
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