Newsletter - Inner Circle April 2023

Inner Circle

Market News - House Prices Up (slightly)

National home values moved up 0.6% in March, according to CoreLogic, the first rise since interest rates started their dramatic rise last year.

Peak to trough, national home prices have dropped 8.5% since April 2022,  winding  back around one-third of their massive 28.6% upswing during the “cash-splash”.

That’s played out differently across the country, with Sydney property losing 12.1%, Melbourne 9.0% and Brisbane 8.6% while Adelaide values are still above last year’s. 

So, is this the bottom of the market?

It’s too early to call in our view. Monthly improvements don’t actually tell us very much and the longer term trends don’t stack up to an upturn; not yet anyway.

And we have more than 900,000 mortgages to be repriced this year. 

A more likely scenario is we will see continued weakness across the broader market with the pain shifting from the top end of the market (mostly a 2022 phenomenon) to the  highly mortgaged section of the outer suburbs in the second half of 2023. 

But there are positives. Rental returns are improving rapidly with the return of migration and this strength will flow through to house prices eventually. 

Source: CoreLogic

And with the number of properties listed for sale down 20% - 30%, very few homes are lingering on the market unsold for months.

Property is a long term game. Patient investors and home owners are likely to book gains once we’re through the current turmoil.

Troubles in the construction industry.

A couple of clients have recently asked us about the strength of the housing market after seeing reports of well-known builders, like Porter Davis, Cayden and ProBuild, going belly up. 

It’s actually a good question and so the answer is you shouldn’t be too concerned. The major issue for builders has been the escalation of costs over the last two years, principally for materials like framing timber, rather than the underlying market for new homes. 

It’s always sad to see companies like these go under but you shouldn’t read anything about the housing market into it. 

Michael Kimbel - a Maven in Melbourne’s East

Our first franchise member, Michael Kimbel, is coming up to his second anniversary with Property Mavens, so I decided to check in and ask him to reflect on his journey. 

“It’s been very rewarding”, Michael told me yesterday, “an ongoing learning experience with a team which provides me with a variety of expertise I can draw on to help our clients”.

“It’s also been interesting. For instance, we’ve seen quite a shift in the commentary around the market recently, with doom and gloom forecasts being replaced with more balanced assessments.”

So, what is Michael’s outlook for Melbourne’s eastern suburbs?

“I’ve been telling my clients to buy now. With a forecast slowdown in residential building and very low vacancy rates, the scene is set for a sustained pickup at some point not too far ahead.

“Throughout this recent period of rising interest rates, it’s poignant to note that investment grade properties have held their prices while poorly placed homes have borne the brunt of the downturn. 

“And it’s investment grade property which will lead the pack as a recovery gains pace.”
 

Why you need an experienced buyers agent.

Congratulations to our latest Albury purchasers, Marion and Paul. 

This couple had relied on expert advice to build a portfolio of three properties and were looking to leverage their accumulated capital growth. 

Anjay Zazulak was able to find this property in the right location, well-placed  to achieve capital growth and strong rental returns into the future.

After some intense negotiations, Anjay was able to secure this home for $55,000 less than what an inferior property nearby sold for.

Why you need a Vendor's Advocate?

Elaine and Craig were wary of the selling process and needed someone to be in their corner to ensure their best interests were met when selling their home.

They turned to Property Mavens and we were able to advise which of three agents was best suited their needs, and provided advice around the best approach to marketing their property.

Property Mavens ensured the property was on the agents’ database before its online ads went live. We then helped the agents complete a sale within three days of showing a buyer through at a price and terms they were happy with – a great result in a soft local market. 

If you want to invest or buy the right home for your budget, or sell your property  click here to book a time, or call us for a chat about securing your financial independence.

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