Call us optimistic, but we sense the tide may be turning in the residential property market. We are currently experiencing an increasing number of people who have decided to enter the market as purchasers. This is translating into solid activity. The foreign buyer ban has cooled the market, particularly in the $2m plus price bracket; we note for the first time more overseas owners selling than buying. However with the shortest day behind us our industry is experiencing the traditional midwinter shortage of new listings. For a variety of reasons, including how the garden looks, fewer vendors tend to list their properties in the winter months. The result is a realigning of the supply and demand equation which is generally frustrating for buyers and very good for vendors. Our company auction clearance rate is in the 80 plus percent range for the 2019 year to date. Food for thought.
It’s going to be interesting to see how the current rental market, particularly at the lower end, plays out. The change in the way investors can off-set losses, the Bright-Line Test, the Healthy Homes legislation and a shift in the LVR are all undoubtedly affecting the appetite for investment. At the same time, as mentioned previously, renters are taking advantage of this moment in this market to become homeowners, in many cases buying those homes that were rented. So the question is – who is going to supply the rental housing in the future? I’m not sure disincentivising mum and dad investors and others is a smart thing, if the tax payer ultimately is left as the supplier of rental housing.
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