Since May, the cash rate has risen from a record low of 0.1, six times to 2.35 per cent, and it appears another rise or two is on the horizon in the foreseeable future.
When rates started rising in May, buyers and sellers were still determining their next move, as establishing the price of a property was difficult. This theme continued until around September when we noticed a distinct uplift in activity. Potential vendors started re-emerging, and buyers started normalising the new interest rate environment after having it so good for so long. They conceded the new reality that rates were unrealistically low and needed to increase back to more 'normal' levels.
October was a great month, with buyers and sellers again able to negotiate more realistically with each other, the unrealistic lowball offers started disappearing, and buyers, in general, adopted a more sensible approach to the market as we once again saw multiple offers and a competitive buying environment, in some cases resulting in an uplift in pricing from the previous few months.
Throughout the years, quality properties in strong and weak markets always sell well; there may be fewer current buyers, but they are the serious ones. I refer to it as rainy-day real estate, there are fewer buyers than on sunny days, but they are the serious ones. When a family turns up with a carload of kids in the pouring rain, they're serious!
Each year spring seems to push out closer to Christmas, as with this October, we have seen many new listings come onto the market; I expect we will see a solid property market performance between now and Christmas, even with a small interest rate rise this month and next month given the fact that CPI rose 7.3% over the last 12 months to the September quarter.
If you'd like to discuss any property-related matter, feel free to get in touch. You can call me on my mobile at 0411 700 099 or email scott@scottbanks.com.au.
Good luck with a fun-filled Melbourne Cup long weekend and backing a winner or two!
Until next month, I trust all your news will be good news. Yours in real estate, Scott Banks
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