Dear Joseph,
Keith's Market Update
Following a 0.4% National decline in May, the CoreLogic Home Value Index recorded a second consecutive month of falls, with the National index down 0.7% in June. Our five largest capital cities, Sydney (0.8%), Melbourne (1.1%), Brisbane (0.4%), Adelaide (0.2%) and Perth (1.1%) recorded a decline in property values. Hobart (0.3%), Canberra (0.1%) and Darwin (0.3%) all recorded subtle rises.
With property transaction numbers at their lowest in April, market activity improved with 21.5% increase in sales recorded nationally in May, and 29.5% more in June. CoreLogic Head of Research, Tim Lawless said "The downwards pressure on home values has remained mild to-date, with capital city dwelling values falling a cumulative 1.3% over the past 2 months. A variety of factors have helped to protect home values from more significant declines, including persistently low advertised stock levels and significant government stimulus. Additionally, low interest rates and forbearance policies from lenders have helped keep urgent sales off the market, providing further insulation to housing values".
Locally, quality stock has remained in tight supply. We are still finding that these properties are attracting good buyer interest, and achieving some healthy prices. Days on market has blown out somewhat, not due to buyer interest or demand, but more so delays in lending institutions in providing prospective purchasers with final loan approval. At the moment it is common for buyers to request 10 day cooling off periods, rather than the statutory 5 days, and it's not uncommon for these to be extended at the banks request. This makes Auctions an even more attractive selling method, helping our clients secure an unconditional sale.
Home values are drifting lower, but by no means crashing. However, I do not believe we will see the true impact of Covid19 until the government stimulus packages are wound back and the mortgage repayment holidays end. Although interestingly the banking industry has come forward to say 45% of their clients who opted for a mortgage holiday have already elected to recommence payments, and another 35% have indicated they believe they will be in a position to pay their mortgages when repayment holiday comes to an end.
At Soames Real Estate we really appreciate there are many people in our community doing it tough. Our annual fund-raising drive for the Salvation Army is probably more relevant than ever this year. If you would like to support this great cause, and also find out the value of your home in the current market, call us today for an obligation free market appraisal. For every appraisal conducted over the months of July, August and September, we will donate $20 to provide a week's worth of meals to an individual. If you add a personal donation of $20, this will provide a family with meals for a week. We will increase the donation to $100 in the event that you elect to list your property for sale or auction with us. To take advantage of this offer, contact your local Soames office to make an appointment.
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