Well, the market has certainly flipped on its head since the middle of the year! Agents have a spring in their step and vendors are now in control.
The inner north has seen a big turnaround in recent months with the effect now filtering out to the outer suburbs. On the ground it feels like the markets in Fitzroy, Northcote, Carlton and even Brunswick are just about in line with the peak of the market in late 2017. Notable sales were 7 Meaker St, Brunswick West in November for $1,372,000 by Sam Abboud of Woodards on the market for 26 days. A couple a little earlier with Nelson Alexander 59 Batman St, Fitzroy North in June for $1,275,000 while just a few houses down the street, 46 Batman St, Fitzroy North sold in August for $1,260,000.
It’s been a perfect storm, with many of the variables that impact on the market all contributing to fast market growth. These variables include low stock levels of quality homes and low interest rates. Since the reduction of the stress testing buffer imposed by APRA, these low rates, in turn, meant that buyers can nearly borrow an extra 10 percent.
This has had an immediate impact in price growth and most importantly, job security is still strong. The only variable that will eventually slow things down in 2-3 years is wage growth.
So, buyers have more to spend, there is no stock on the market and interest rates will possibly go further south.
As a result, we envisage further growth of possibly double digits in 2020, which will mean that properties like the two in Fitzroy North’s Batman Street with be worth in about $1.4-1.45 by late next year. Incredible how a 2-bedroom, single-front weatherboard Victorian home (in albeit a very good location) on some 150m2 with possibly no parking, will sell for nearly $10,000 per sqm.
I can only see a slowing of this growth if we have an influx of stock next year. However, I don’t see it ahead. The young couples and families that have been buying these 2 or 3 bedroom homes for the last 10-15 years are staying put, not moving on.
They might have one or two little ones and now need more family space, but if the property allows, they are choosing to renovate instead of upgrading. The jump to upgrade to a bigger home in the same location, with all the amenities, cafés and restaurants that the inner north offers, will be over $700-800,000.
For $400-500,000, they can do a really nice renovation and not have to pay stamp duty. Turnover is the current problem in the inner city and the northern suburbs.
This market really highlights the need for buyers advocates to uncover properties not on the market through our strong networks. We’re speaking with our contacts daily and have a database of homes across the inner north that are not for sale publically.
Contact me below if you’d like to learn more about the off-market homes in my database.
