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Pent-up demand from Melbourne home buyers sees a rush to purchase post-lockdown

By Mikaela Fowler

Pent-up demand from Melbourne home buyers could prompt a busy late spring selling season, but experts say prices could still fall over the coming year.

Buyers and sellers have barely 12 weeks – the time it can take for a property settlement – to make a move before Christmas, after private inspections resumed this week.

Melbourne’s peak period for property transactions started a month late this year, thanks to strict COVID-19-related restrictions banning all in-person property inspections until late September.

A handful of sales took place based on virtual tours, but home values in Melbourne fell harder than any other capital city in September, down 0.9 per cent in the month on CoreLogic figures.

“Some buyers have set that arbitrary emotional date of Christmas, others have access to pre-approval and they’re not keen on going through that rigmarole again,” Real Estate Buyers Association of Australia president Cate Bakos said.

She said the large number of buyers and few properties on the market had left many buyers with “FOMO”, or fear of missing out. Just 45 auctions were scheduled this weekend compared with 705 this time last year, according to Domain data, although it’s a slight lift from the 12 scheduled a fortnight ago.

But she said the listings were coming, and predicted a more even proportion of buyers and sellers in coming months.

Melbourne auctions, first weekend of October

DateNumber of scheduled auctions
October 3, 202045
October 5, 2019705

Source: Domain 

The sudden increase in transactions could cause an October or November uptick in prices, NAB chief economist Alan Oster said, but it was not a sure thing.

“There will certainly be a spike in sales, whether it’s a spike in actual [prices] I don’t know,” Mr Oster said.

He said while other Australian markets had fared better than first expected post-lockdown, he still anticipated a further 10 per cent fall in Melbourne house prices in the next six to 12 months.

“Unemployment’s going up and we’re not expecting to see international borders opening anytime soon,” he said. “I still worry about what’s going to happen in terms of reductions in government support, JobSeeker and JobKeeper.”

Some segments of Melbourne’s market would cope better than others, Marshall White director John Bongiorno said.

He said it was likely the spring selling season would push out into January with agents potentially taking a one-week break over Christmas and New Year’s, and then getting back to it.

“We’ve been through lockdown, we don’t want to go through a shutdown over January as well,” he said.

“A-grade properties in the $2 million to $5 million range are keenly sought after,” he added, referring to the areas his agency covers in the inner south and east.

Ray White Victoria and Tasmania chief executive Stephen Dullens said his agency had seen some heightened activity in outer areas such as Craigieburn and through the western suburbs.

“Anecdotally we’re seeing that,” Mr Dullens said. “The buyers are definitely there, it’s just a question of what the supply looks like.”

Adding to that supply are sellers Alan and Melissa Gavalakis, who listed their home at 4 Hampstead Place, Craigieburn this week.

“Ideally we’d like to be out before Christmas, obviously we would have had an auction and been done by now,” Mr Gavalakis said. “It’s going to be touch and go.”

Their auction campaign was pushed back by a month and a half, as they had planned to have photos of the house taken just as the stage four lockdown hit.

“It was definitely stressful – the unknown’s the worst thing,” he said. “But it did give us a bit of extra time to do some things around here. I didn’t have a water feature six weeks ago, but now I do!”

Their listing agent Daniel Diamantopolous from Ray White Craigieburn expected a strong response for the four-bedroom property, with a price guide of $630,000 to $680,000.

“No sooner than you put something on the market, your phone just goes nuts with inquiries,” Mr Diamantopolous said.

Mr Gavalakis was quietly confident about the sale, hoping the result would support the couple’s plans to move into the Strathmore Secondary College school zone for their two young daughters.

“It could be a very niche time to sell – hopefully there’s a lot of people out there that want to buy,” he said.


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