Despite the advent of winter traditionally also heralding the quietest period of the year for the property market, Melbourne continued to perform strongly throughout June. According to researcher RP Data, average property values rose by 2.3% during the month, taking Melbourne’s 2013 financial year growth to 3.4%.
Property Observer reported on Real Estate Institute of Victoria (REIV) figures estimating that by the end of June, there had been approximately 3175 auctions conducted across Melbourne. The group says only once during the past decade have the number of June auctions been higher, in 2010. According to the REIV, the year-to-date auction clearance rate now sits around 70%, driven upwards by a flood of first home buyers rushing to take advantage of the state grant for existing dwellings before it expired on 30th June.
Meanwhile, the Reserve Bank’s decision to leave the official cash rate on hold at 2.75% at its early July monthly meeting was widely anticipated. Experts are now saying consumers can expect many more months of historically low interest rates, with the possibility for further cuts still on the horizon.
In key political news, the nation was shocked last month when Kevin Rudd defeated Julia Gillard in a caucus ballot for the leadership of the Labour party. In his role as the new Prime Minister, one of Rudd’s first announcements was that he would scrap Gillard’s nominated date of September 14th for the next Federal election. With four dates allegedly under consideration in August and October, experts say an earlier-than-planned election date would help boost confidence in the property market.
But while many media reports are more optimistic, the experts remain divided. According to director of SQM Research Louis Christopher, Melbourne house prices are only expected to grow by between 2% to 5% over the 2013 calendar year. Christopher says he doesn’t expect any major recovery for the Melbourne house market, with stock levels in many areas remaining stubbornly high.
While buyers need little encouragement to act, they remain on the whole reluctant to pay a premium. For vendors, a successful marketing campaign hinges on an acceptance of current market values and a willingness to meet the market.