Home values on the rise
THE prospect of further interest rate cuts and low stock levels is putting Geelong house prices on track for growth.
Geelong home values rose 1.1 per cent in November, the latest CoreLogic Home Value Index shows, as a rapid recovery in Sydney and Melbourne property markets flowed into the regions.
The median dwelling value reached $552,000, rising 1 per cent over the past three months, although the market is still 2.9 per cent below last year’s peak.
CoreLogic head of research Tim Lawless said interest rate cuts, easing of loan serviceability rules and removal of uncertainty around taxation reform were central to the recovery.
“Additionally, we’re seeing advertised stock levels persistently low, creating a sense of urgency in the market as buyer demand picks up,” Mr Lawless said.
“There’s also the prospect that interest rates are likely to fall further and an improvement in housing affordability following the recent downturn are other factors supporting a lift in values.”
But low wages growth could provide headwinds, should the recovery continue to accelerate, he said.
McGrath, Geelong, agent Will Ainsworth said the pace of growth in Melbourne meant buyers were once again heading down the freeway, increasing local competition.
“I think the Melbourne market having such a shortage of stock means buyers are getting outpriced again,” Mr Ainsworth said.
In recent weeks, more properties going to auction have attracted multiple bidders and sold above reserve prices.
“The confidence is there that if they have to pay a little bit more at auction they know the value is there still,” he said.
But Mr Ainsworth said he expected similar price growth of 1-2 per cent next year.
“I think next year is going to be a good market for buyers and sellers. I don’t think there is going to be a huge amount of growth,” he said.
Newtown agent Dale Whitford said some extraordinary recent sale results showed confidence in the market.
“There’s still not as much property for sale as there normally is at this time of the year,” Mr Whitford said.
“That is the relative scarcity factor, and maybe confidence is up.
“We’ve had multiple offer situations where people had all offered above the range and they all say, ‘We just don’t want to miss this’,” he said.
“I wouldn’t say it’s a boom market, it’s got some good fundamentals.
“You’ve got some good properties flying out the door and you’ve got some that stick around.
“The only reason they stick around is price. If vendors are realistic and price correctly they let the market compete.”