Happy New Year!
The New Year is upon us and with it a sense of post-holiday optimism in the residential market. The market undoubtedly slowed in 2018, for a range of reasons, not the least of which was a sense of uncertainty on the back of some fundamental changes. However, it would seem things are literally now thawing out, activity is increasing. We are observing renewed competition for some properties.
One of the potential grey clouds on both volume and values is the Government’s Overseas Investment Bill. This controversial piece of legislation is designed to limit foreign ownership. This came into effect from 22 October 2018.
An ongoing point of contention is the relevance of certain CVs (Council Valuations). Historically it has been acknowledged that likely market value will be in excess of this figure. Currently in some cases the selling price has been less than the CV. This has caused many home owners anguish. The fact is, the CV is the result of a mathematical algorithm, it is an arbitrary figure.
In short, no one made a physical inspection as part of the assessment of a CV. Broadly speaking, those properties with a high land areas are most likely to have a CV higher than the market value.
The legislative, tax, and banking (LVR) changes made in recent times have changed the dynamics of the market place. Put these factors alongside the introduction of the new CVs and you have a recipe for increased due diligence as both buyer and seller find a meeting of the minds.
We note buyers are encouraged by the unchanged OCR and with it indication that interest rates may hold to 2020. In short, we would expect an increase in sales activity in 2019.
As at 30 December 2018 our sales numbers were 35% up this financial year on last year. We know this is not the industry norm. This is a market where our experienced sales team and the added value of bespoke marketing and hands on management really counts.
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