When assessing what the property market is doing, gaining insights from those of the front line is key to knowing the truth. The media and reporting outlets announce figures and statistics that are often a month out of date, so what is really happening on the ground, right now?
Real estate agents crazy busy with buyers and sellers
On the Central Coast, we’re hearing that the property market is much stronger than what mainstream media is reporting. As we know, the media do love a doom and gloom story, but the property market, particularly on the Central Coast is bucking the trend.
We spoke with Damian Montgomery, owner of LJ Hooker Budgewoi, today about the Central Coast property market and what he’s seeing on the front line, “The market at the northern end of the Central Coast is continuing to surge. Our team bagged some fantastic results for our owners over the long weekend. On Friday, an original 3-bed brick home sold to retirees before hitting the market for $485,000. Saturday we saw an older 4-bed home in Hamlyn Terrace attract 11 buyer inspections in the 1st 24-hours, resulting in a sale to a young Central Coast couple at $65,000 over the price guide. To round things of, on Sunday a freshly renovated 3-bed clad home in Toukley sold to first home buyers for $577,500!”
Damian said that fewer listings and low home loan interest rates has seen buyers pay good money for well-presented homes. Buyers aren’t haggling for bargains as we aren’t seeing distressed sales or values drop, so the confidence in low interest rates lasting for a several years is prompting buyers to pay over the asking price to secure their first or next home.
It’s likely the restrictions on international travel is also prompting buyers to look at the Central Coast as a potential holiday location, as buyers think outside the box for future income potential.
Buyer demand outweighing volume of listings
CoreLogic reported that there is a surprising sign that the property market is stabilising with home sales and new listings rising in May. In fact, buyer demand is outweighing the volume of new listings!
CoreLogic counts an advertised property as a ‘new’ listing if it hasn’t been listed on the market in the past 72 days. Total listings are the sum of new and re-listed stock for sale on the market. In the 28-days to 31st of May, new listings rose 22.4% on the previous period, but total listings fell -2.9%. This means that as more new stock came onto the market, but buyer activity offset the additional stock.
Mortgage brokers see influx of home loan applications
A lead indicator of market changes is the sourcing of home loans to purchase properties. As mortgage brokers, Mint Equity has been flat out with new applications for both first home buyers and established home owners looking to upgrade to larger properties. Owner occupied home loan applications make up 65% of all applications Mint Equity have submitted over the last month. We seen a sudden increase in people deciding to buy now rather than later.
Also, JobKeeper payments are an accepted income by lenders, which many borrowers are surprised to hear. Those who are self employed are experiencing increased assessments by the banks as lenders want to ensure that business are still profitable in Covid-19 conditions. Many lenders are asking for the latest bank statements, not just the latest BAS, for the business to ensure revenue is still coming in.
If you’re considering buying property now, it’s best to get a pre-approved home loan in place so you can hit the property market with confidence.
Where is demand coming from?
Consumer confidence improving
The ANZ Roy Morgan weekly consumer confidence index has risen consecutively for the past 9 weeks. At the week ending 31st of May, the index is 50.5% higher than when it bottomed out in late March. Covid19 restrictions being lifted is having an impact on confidence and the future of the Australian economy, their personal finances and property purchases.
Covid-19 workers with job losses less likely to have mortgage debt
The types of workers impacted by job losses due to Covid19 are less likely to have mortgage debt. 46.1% of jobs have been lost across accommodation, food services, the arts and recreation which disproportionality affects renters rather than owner occupiers.
For now, market conditions have been relatively stable because those most affected by the economic slowdown of Covid-19 aren’t predominately those with a mortgage obligation.
Further reading
Buyers are surprisingly responsive to a rise in listings over May
ANZ Roy Morgan Weekly Consumer Confidence Index
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