The property market has turned a corner since the advent of COVID-19 with prices increasing nationally for the first time in five months, by 0.4 per cent in October, with Melbourne the only capital city to record a fall in values.
As home buyers hit the market, competition intensifies with the number of bidders this spring on the rise.
Data issued by The Ray White Group advised at least five people on average registering to bid at their 297 auctions, across Australia over the last few weeks, with three actively bidding.
Although the COVID-19 pandemic triggered a brief five-month slide in the market, CoreLogic data suggests values are on the rise. There is no doubt the rate cut decision elevated the issue of borrowers taking a look at their loan repayments.
In the market itself, demand for homes worth $10 million-plus is surging, supply has also seen an increase and restraints on overseas travel caused by COVID-19 have encouraged luxury upgrades.
We are hearing that demand from Australian expatriates returning from overseas has picked up, which could support strong conditions.
— Tim Lawless, Corelogic's head of research
According to seller's and buyer's agents, sales in Melbourne’s most exclusive postcodes have picked up as property inspection and auction restrictions ease and Sydneysiders were also back in the hunt for prime property.
All the agents claimed another big demand driver was Australians upgrading or splashing out on second and third luxury properties because annual overseas jaunts have been curtailed by COVID-19 restrictions.
Having said that, research by the Reserve Bank of Australia, which cut interest rates to a historic low of 10 basis points, found that more expensive properties tended to react more sharply to changes in monetary policy.
Areas where the demand for multi-million-dollar holiday homes shows strong signs is in Melbourne’s Portsea on the Mornington Peninsula, Sydney’s Palm Beach and Queensland’s Whitsunday Islands or Noosa.
Generally speaking, the overall residential property market outlook has also improved, with national house prices rising two basis points, the first increase since when Covid 19 started. According to analysis by global investment bank Morgan Stanley, this would essentially reduce the total decline in national prices during the past six months to just over 3 per cent.
Melbourne was the only capital city to post a decline in overall prices, Sydney was flat, while prices in Brisbane and Perth grew by about six basis points, its analysis revealed.
*Information within this publication has been sourced from Realestate.com.au, Australian Financial Review, The Ray White Group and Core Logic.