We’re beginning to see glimpses of spring, so what can buyers and sellers expect as the real estate market’s busiest season looms? How do you know if the Melbourne property market is actually recovering, and when the time will be right for you to buy or sell?
The headlines don’t always provide clarity, as we see a confusing range of property market forecasts and differing reports on investor activity, hot and cold suburbs, rising house prices, falling house prices, and current property values.
Of course there is no definitive answer to exactly how the property market will perform, but there are some reliable indicators based on statistics obtained by the Real Estate Institute of Victoria. Looking out for reports that mention these four things will give you a clue as to what direction Melbourne’s property market is really heading:
1. The Residential Market Index (RMX) tracks property price movements and provides monthly comparisons. In July, Melbourne’s RMX was 151.9 and in August it rose 1.6% to 153.5. That is a general indicator of upwards property price movement.
2. High auction clearance rates indicate strong buyer demand which is favourable to sellers. Low clearance rates indicate a weaker market, potentially better for buyers. In July, Melbourne’s clearance rate was 79.5%, rising 2.1% to a healthy 81.6% in August.
3. Days On Market (DOM) shows the number of days it takes to sell a property after it is listed. A high DOM indicates homes aren’t selling quickly in that area and a low DOM shows high buyer demand for that suburb. On average, properties take between 30 and 60 days to sell. In July, Melbourne’s average DOM was 45 days. In August, it was 44 days, a minor difference but a shift that reflects increasing buyer activity.
4. When they talk about transaction numbers in real estate, they are referring to the number of sales. In July Melbourne saw 10,935 property transactions and in August it increased by 576 to 11,511, reflecting a healthier market consistent with property value growth.
With these positive indicators occurring during winter, we can certainly look forward to a blossoming spring property market with more stock and motivated buyers.
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