What’s in store for Victoria’s property market as we head into a new financial year?

If there was one thing that defined the property market in the past month, it was the end of the financial year rush.

It was a race against time for buyers to get property deals through the door by June 30 in Victoria, before the state government implemented major changes around stamp duty.

The main changes affecting property buyers include:

·?Stamp duty incentives scrapped - 25% discount for existing homes priced up to $1 million?and a 50% discount for newly built properties under the same threshold.

·?Premium stamp duty rate introduced – For properties valued above $2 million, stamp duty will be increased to 6.5%,representing an extra percentage point on stamp duty.

Soaring property prices cannot be ignored. June marks the 7th consecutive month of rising housing values in the city since the short-lived COVID-19 dip.

Melbourne property prices lifted by 1.5% over June and 7.7%in the past year, taking the median property price to $753,100, according to CoreLogic.?

In regional Victoria, price growth remained stronger. Values increased by 2% in June and skyrocketed by 15.9% over the year.

Buyers hungry for stock

REA Insights’ Weekly Buyer Demand Report for June 30 indicated a pattern of recovering engagement from buyers after lockdown conditions eased in Victoria. Most recently, buyer activity showed a noticeable increase after the two-week lockdown in early June.

Clearly, buyer demand is solid. But there’s just not enough supply to go around.?

The level of stock really depends on which market you look at. For instance, listings in the Mornington Peninsula are down by about 70%.In markets like this, buyers are hard pressed to secure a property, and there’s fear in the market that they will miss out.

Of course, there will always be people that need to sell, but the concern is that there’s not a lot of housing stock and everything that does come up is selling.

Indeed, it is a very tricky market for buyers.But there are certain sub-markets like St Kilda and Brighton, where there are a number of off-market properties.?

In other areas, there’s not so much, which explains why there was such a push for the end of financial year.

As the new financial year begins, many are anticipating a renewed market with a ‘wait-and-see’ approach. Nervous buyers are asking big questions: What's going to happen in spring? Will there be more stock??

From our conversations with sales agents, we’re not hearing that their pipelines are full. It doesn't yet appear that there's a good deal of stock heading for spring and we hope that changes.

An abnormal year

Taking COVID-19 out of the equation, if you look at the ebb and flow of the market, the number of listings traditionally spikes in spring and dips in winter. Yet this was not a normal winter,but a winter with lower supply than usual.?

However, we need to be particularly wary with the data this year. For instance, prelisting activity in Victoria appears to be exceptional upon first glance: it rose by 9% in June, and surged by 28% when compared with the same month last year.

But here’s the thing: Victoria was in lockdown for most of the year in 2020 and homeowners would’ve understandably been reluctant to take their property to the market. So of course the prelisting activity looks positive when compared with data recorded in a lockdown. Compare 2021 with 2019,when it was a normal year.

While the market continues to be hot, there has been a noticeable shift in the property market. Some of the biggest factors include:

·?a possible increase in interest rates

·?uncertainty around COVID-19 that has continued

·?changes with stamp duty·?changes in various government grants& incentives.

If any of these are putting you in doubt, remember that people will always need to buy and sell property. Experience tells me that when there have been market changes in the past, it just gets absorbed into the price, and then water finds its natural level. There may be a lull but after that, it’s business as usual.?

Negotiating done right

When it comes to negotiations, there are many aspects involved that most people don't think about.?

As a professional buyer’s advocate, understanding my client’s concerns and motivations are paramount. Are they prioritising the length of settlement period, do they have a magic number in mind, or is it the specific terms they care about??

Then there’s the sales agent front. The relationship we have with the agent, how we conduct ourselves with them, our track record with them,the level of trust they have for us – this all contributes to the result.

It's not just about the negotiation itself, it’s about the homework we do before negotiation.?It’s what we do in the lead-up that really decides the outcome for our clients.

At Davidson Advocates, you can trust us with your property purchasing decisions. With more than 30 years of experience in the industry,our team is armed with the type of insider knowledge that will make an invaluable difference to your home hunting journey.

Recent success

The beginning of the journey for these two. Signing our offer - we scanned it and sent it off to the agent. 10 minutes later they were property owners! Loved working with you both! Thanks Lena Fox for your help.

Late Sunday night negotiations. Success at 9pm. Off market Brighton purchase. The stars aligned and we were all elated. We loved working with these two- great value! Thank you Alex Schiavo from Kay and Burton for facilitating.

What gorgeous clients. They sent us this happy selfie. Purchased in Port Melbourne off market. What an exciting journey. We are now collaborating on their sale with Woodards at 3 Walnut Street Carnegie. Thank you James Nicolou from Buxton Port Melbourne for all your help.

Happy days!!! Final Inspection. We secured this property for our super nice clients off market. Inspected at 12pm, then at 8pm and after 3 days of negotiations, we bought it! Thanks to Ash Howarth from Marshall White for facilitating the sale. (and late night appointment!)