Firstly, I hope you and your family are healthy and coping well during this second lockdown phase that we find ourselves in. Everyone has different challenges to overcome with isolation and we have heard so many stories of many different experiences, both heart-warming and heartbreaking. Surely the best way to get through these challenging times is to stick together as much as possible and to do what we can to support those in real need.
I am writing to you today as I feel it is important for our community’s confidence that people have an understanding of what is happening in the real estate market. There seems to have been a lot of negative press recently about house prices, which I know can affect people’s views on their own situations. Combined with everything else that’s going on, uncertainty about the housing market can even impact on some people’s mental health. Statistics from the REIV show that consumer confidence and house prices go hand in hand, so hopefully what I’m about to share with you will put a bit more pep in your step! We are feeling very fortunate that we are working in an industry that is seen as an essential service (buying, selling and renting homes), and we don’t take this for granted.
I hope you find this update interesting and some positive news for your day.
Ray White Croydon
House Prices & Clearance Rates During COVID-19
At Ray White Croydon we have seen very little change in house prices since the start of the year (i.e. prior to Corona Virus). We are one of the few agencies in the area conducting online auctions and we are currently listing about 50% of houses for auction and 50% for private sale. We are finding that our auction properties on average are selling in 22.3 days (March to July 2020) while private sales are averaging 45 days. Between March and July this year 87.5% of our properties sold by auction day (12.5% of these prior to the day) and 100% sold within one week of the auction. 100% of these properties sold above reserve price – anywhere between $8,000 and $100,000 above.
The REIV statistics for the June 2020 quarter have just been released and they show house price medians varied in Maroondah and Yarra Ranges, from a decrease of 6.1% in Croydon Hills to an increase of 20.6% in Croydon North. Interestingly, the only suburbs locally that recorded over 30 sales in the area (meaning the median price is more accurate) were Croydon, which was down 0.9%, and Ringwood, which was up 0.8% for the quarter. The other noteworthy fact is that all suburbs we track closely in Maroondah and Yarra Ranges were up in the vicinity of 5% compared to last year (except Warranwood, which was down 0.8%). This again shows that overall the market has held up really well.
(Click on the Stats for a bigger view)
House Inspections During Lockdown
Over the coming weeks while Melbourne is in isolation, the real estate industry can continue to list and sell houses, though obviously the process will look a little different. Instead of doing open homes we are now conducting private inspections by appointment only. At Ray White Croydon we have software that allows buyers to book 10-minute inspections online. All potential buyers are required to sanitise hands before they enter a home and wear face masks (as of Thursday) when they inspect properties. After each private inspection our well-trained agents will then wipe down high-traffic areas (such as pantry and door handles) before the next viewer comes through. Our agents will also be wearing facemasks and sanitising their hands regularly.
Inspection Numbers During Lockdown
As you would expect, both times we have gone into lockdown over the past few months and therefore been unable to conduct open homes, our inspection numbers have declined. We went from an average of nine groups through on our Saturday open homes to an average of five private inspections on a Saturday. However, this reduction in inspections does not seem to be having a negative effect on the overall results for our vendors. What we are finding is that genuine buyers who are able to buy now and who in many cases have their finance fully approved are still coming through. The drop-off in inspections seems to be from those who are just starting to do their real estate homework, or neighbours. One of the great benefits to doing private inspections is the fact that we get to talk with clients on more of a one-on-one basis, without distractions, so we are actually able to get to know them and their needs more closely. This certainly helps them to find the right property and helps when we get down to negotiations too.
Rental Market Update
We are also experiencing great results in our rental department, our days on market continues to sit between 10 – 17 days, this is half of the average in our area , properties are continuing to lease quickly to quality tenants and our weekly rental returns are holding strong.
During the last quarter we received 2481 rental enquiries, received 284 applications and leased 61 properties. We are seeing a significant increase of potential investors looking to enter the market. This is great as we are a little light on stock due to the high demand of rentals in our area. Obviously the fact the rental market in our area is still going strong means that some tenants will find it difficult to find a property to rent – we’d be happy to talk to any potential tenants before you start your search to ensure you are presenting your application in the best light.
Now that we have returned to stage 3 restrictions we would like to take this opportunity to assure our clients and investors that it certainly is business as usual for the real estate sector albeit with a few changes, we have returned to our isolated routine inspections for our tenants and the system we are using is working well, we have also reintroduced private inspections for all our rental homes. So if you have been thinking of investing I strongly suggest that now is one of the best times to do so and I welcome any opportunity to discuss the rental or sales market with you.
So, as the figures show, there are many reasons to feel optimistic about the real estate industry generally and your own prospects in terms of selling, buying or renting a home even during the current unusual circumstances. And of course, as always, we at Ray White Croydon are happy to have a chat about your particular needs any time you like.