📊 #RealEstateUpdate - December 2023
Well 2024 is here and we’ve hit the ground running…
I mean realistically things didn’t actually “stop” with open homes and private inspections still happening through the festive season but a few slower starts to the days were certainly appreciated.
So what’s ahead this year?
Market wise we can expect pretty much the same conditions as we left behind us in 2023 with all indications showing that interest rates won’t unfortunately be making a downward move anytime soon and we are also sitting in a bit of a holding pattern until we see what the numbers are around how many properties come onto the market for sale. That said, there was a pick up in the number of people out inspecting properties on the last weekend of the year which is a great sign.
Price wise there’s never all that much to report this early in the new year but the median house price for 3977 in December was sitting at $710,000.
Now... the headlines are telling everyone that Melbourne house prices rose 8 or so percent in 2023… and you know I’m always harping on about not all markets behaving the same and here’s the proof in the pudding… here in postcode 3977 in 2023 we were 13.6% down in the total number of houses sold when we compare that to 2022 and the median house price is down just a smidge - which more accurately is 1.38% which for all intents and purposes I would consider that to be neutral.
There’s a lot of variables that go into statistics and such a minor dip could pretty much be written off. Dont’ forget though if you’ve been in your home for 5 + years, congratulations, you have had a HUGE and abnormally high equity gain over recent years.
So why is it that we are not up by 8%??
The powers that be are using interest rates to "control” the impact of inflation. Generally speaking the majority of our buyers are reliant upon a loan for their purchase. It makes logical sense that when interest rates were so unnaturally low we saw an absolute boom in price growth - people had access to larger amounts of money and this bought so many more people into the market for the first time. Unfortunately the opposite happens when the rates go up and the serviceability requirements for loans now is seeing approval amounts being cut and some not even qualifying for the finance to buy what they would want to buy.
Is it all doom and gloom?
Definitely not. If you are buying into the market for the first time, NOW is the ultimate opportunity to get into the market before the prices hike again... and they will when the first interest rate cut is announced. If you are looking to Trade your house in for a different one, while you may not get a “record price” for your existing home, you also won’t be paying an inflated price for the next one which usually brings things out equally in the long run and house values ALWAYS end up higher than when you bought it - typically doubling in value over a 10 year period. All in all, we are heading into 2024 with stable conditions with just a touch of the unknown.
Happy New Year to you and yours!