A “feeding frenzy” is tipped to hit Melbourne’s housing market now key real estate restrictions have been eased, with prices set to rise as a result.
But there are question marks about whether a post-COVID recovery will carry on into the New Year, with struggling inner-city suburbs a major concern.
Property pundits are more buoyant about the prospects of outer-Melbourne and regional markets, which have already begun to boom as people reassess where they live, work and play.
CoreLogic data shows regional Victoria’s house and unit value had increased by 5.28 per cent to a $387,870 median in the past 12 months.
Real Estate Institute of Victoria president Leah Calnan tipped regional property prices would rise even more once Melbourne residents could travel there for private inspections.
“It will be crucial for the government to put supporting infrastructure into regional towns as there is a transfer in population,” Ms Calnan said.
She expected buyers to “look for opportunities that offer more land” — and with housing affordability a long-running issue in Melbourne, regional Victoria could be their best bet.
She said the federal government’s HomeBuilder grant, and expansion of the First Home Loan Deposit Scheme to include an additional 10,000 places and a raised $850,000 cap in Victoria, would help young people get on the property ladder in the form of new builds.
A “deregulation of responsible lending” announced by Federal Treasurer Josh Frydenberg last week would also boost buying opportunities across Victoria, Full Circle Property Advocates director Rob German said.
“Funding is going to be much easier and not as onerous, with marginal borrowers suddenly becoming valuable commodities to banks again,” Mr German said.
“Banks are already starting to look at borrowers slightly differently to before, which could lead to some fantastic opportunities for people hoping to buy.”
Scrapping or revising stamp duty — a move flagged by the state government in April — could also improve housing affordability, he said.
Propertyology head of research Simon Pressley said Melbourne home prices had been at risk of shedding “as much as $100,000” during the pandemic, but it was too early to tell whether the grim prediction would become a reality.
He tipped a short-term homebuyer “feeding frenzy” to follow the revival of inspections, with the market’s real test to emerge “past the New Year” when sales listings return to pre-pandemic levels.
“There will be a bit of false confidence between now and Christmas because of the pent-up demand, which means prices will go up. But that’s only because there’s a really small volume of properties available,” Mr Pressley said.
Investors could avoid Melbourne for up to two years, until the full economic impact of lockdown was realised, he added.
Realestate.com.au data also reflects a regional boom, with Shepparton, Loddon, the Moira Shire, Castlemaine and Bellarine Peninsula experiencing some of the largest spikes in views per property listing since coronavirus kicked in.
But it found Melbourne was mounting a comeback, with requests for inspections doubling and buyer search activity soaring 40 per cent in the days after the inspections ban ended.
Chris and Kate Oliver were prepared to list their Frankston South property during stage four restrictions, but said it was a relief when the state government lifted the private inspection ban ahead of schedule.
The family of four put their charming weatherboard at 3 Watson Street on the market just one day after changes were announced by Premier Daniel Andrews.
“We’ve been really happy with the level of interest so far, we had five or six inspections booked in for Saturday,” Mr Oliver said.
“We were always planning to upgrade around now and we’ve been watching realestate.com.au but there really hasn’t been a lot on the market.”
The family will move into a nearby investment property rather than attempting to buy during the stock shortage, he said.
Ray White Frankston listing agent Brooke Wegener said she had been “inundated with buyer inquiries” since real estate restrictions eased, but there was “not enough available” to meet the intense demand.
“Being able to do private inspections, property appraisals and take photography is the key ingredient that’s just returned to the market,” Ms Wegener said.
“It would be great to have onsite auctions again, but we’ve had success with online sales as well.”
She encouraged prospective vendors to “get organised” and take advantage of limited stock that was driving competitive sales results across Melbourne.
Realestate.com.au chief economist Nerida Conisbee said some inner-city markets remained a concern, with residential rental vacancy rates climbing to record 10 per cent in the CBD in August, according to SQM Research.
“People aren’t working in the city anymore, we don’t have foreign students returning and renters who lived there have moved out after losing income,” Ms Conisbee said.
“There’s no sign of the inner-city apartment market improving until we get hospitality, tourism and education back.”
CoreLogic’s head of research Tim Lawless said Victoria’s listing numbers remained down 75 per cent on last year, but consumer confidence was bouncing back quickly.