Despite the fact that Melbourne listings dipped to a mid-winter low last weekend, analysts expect the market to bounce back strongly come August. The only problems that buyers may have to face are their reduced capacity to borrow and a continuing shortage of A-grade properties.
With most bank lending policies being revised in the past couple of months, finance experts reckon that the stricter loan rules are affecting both buyers and vendors with bullish price expectations, as these reduce the amount people could borrow to buy a home. Many agents say that banks are compelling hundreds of prospective buyers to reapply for new loan pre-approvals, as loans approved prior to the May rate cut have been invalidated by many lenders.
According to the Domain Group, last Saturday saw Melbourne post a vigorous clearance rate, with 74 per cent of properties selling from 360 reported auctions. While it is rare for Melbourne to fall below 500 auctions, Domain Group chief economist Andrew Wilson believes that listings would climb over the following weeks.
“The market is seeing lower numbers in winter because of anticipation among buyers and sellers that there will be a seasonal pick-up in the second half of August and September,” Wilson said.
However, Hocking Stuart’s Andrew James sees only a moderate increase in listings.
“Quality and position is pre-eminent--people are prepared to pay some premiums,” he said. “I don’t think the spring market is going to be out of the ordinary. There will be an increase in volume but you won’t see a giant spike.”