Why industry experts are saying now is the time to buy in Melbourne
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Jan 16, 2019
Why industry experts are saying now is the time to buy in Melbourne
As the Melbourne property market begins to self-correct after decades of rapid price hikes, experts are tipping an upswing is in store, and buyers should pounce now.
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RT Edgar ToorakPictured: 18-20 Shakespeare Grove, Hawthorn. For sale by Jeremy Fox and Jack Edgar of RT Edgar Toorak.
Property stalwarts are tipping now is the best time to buy in Melbourne, as the market begins to self-correct after decades of rapid price hikes.
Melbourne's housing market looks set for another year of price falls, amid weak sentiment, curbs on borrowing, and an increase in supply.
The city’s residential market has been coming off the boil after years of rapidly rising prices, with a regulatory crackdown on bank loans and scrutiny of lending standards from the financial services royal commission.
But the recent correction has sent waves of concern among buyers and industry commentators alike, with many declaring that this might signify the end of the fabled ‘bubble’.
It's important to remember that Australia has seen this many times before, and each time the market bounces back stronger than ever. After each downturn, the market has recovered within a short time and prices have resumed on a steady upward rise.
Seasoned property experts such as Elias Jreissati of Bensons Property Group, Luke Hartman from Metro Property, and Leonard Teplin from Marshall White Projects have seen it all before.
They say the market has reached "real value levels" and market fundamentals point to a positive upswing in 2019, meaning now might just be the best time to pounce, and make the most of current conditions while they last.
“We’ve seen this happen all before; any time there is uncertainty about the property sector, particularly around an election, buyers will sit on their hands and wait to see what happens next. It causes the market to stagnate and drives prices down, the irony of which is that it makes it the perfect time to buy," Luke Hartman, Managing Director of Metro Property told WILLIAMS MEDIA.
Pictured: Luke Hartman. Image supplied by Metro Property.
“Markets do recover, and I don’t think it will take long. This year we will have much more certainty on the direction the market is going following the results of the Royal Banking Commission and the federal election. Once that happens, I think the market will bounce right back up.
Mr Hartman says there is "currently a very small window of opportunity that exists for buyers in the market before that happens.”
“Those that are brave enough to buy property when there is a weakness in the market are those that will prosper the most. There are fewer buyers to compete with, properties are better valued and when the market inevitably picks back up again they will see their investment pay off with a significant capital gain.”
Group Chairman of Bensons Property Group, Elias Jreissati agrees, saying the extent of the current softening is "highly exaggerated and sensationalised".
Pictured: Elias Jreissati. Image supplied by Papermill.
"The Melbourne housing sector had very strong growth for nearly 10 years, it is natural that there will be a slowdown for a while. The fundamental driver of housing is population growth and it continues unabated. Overseas immigration is still strong, people are still growing up and wanting to move out of home, downsizers are still wanting to downsize and people wanting to own their own home still aspire to do so. These facts never change," he said.
“With the mad heat having dissipated from the market, there should be more quality stock available for the discerning purchasers. The thing with property is that if you own it for the long term, it always forgives you and profits you," Mr Jreissati told WILLIAMS MEDIA.
Dealcorp Executive Chairman David Kobritz believes we're at the end of the downturn.
Pictured: David Kobritz. Image supplied by Dealcorp.
“The fundamentals in the market remain strong particularly around low vacancy rates, population growth, increasing cost of construction and foreign buyers with a strong appetite to purchase. I think we are at or close to the bottom of this downturn/cycle and we should return to strong growth in the medium term, especially as the supply side will reduce significantly over the next few years," he said.
“The heat has been taken out of the market and will return to more normalised conditions. Now there are opportunities to buy sites at better prices and terms than in the past as there will be fewer players in the market.”
"No doom and gloom" for apartment market
Director of Marshall White, Leonard Teplin says the apartment market for off-the-plan remains strong.
Pictured: Leonard Teplin. Image supplied by Marshall White Projects.
"Given the relative affordability of finance for couples, these buyers are happy to invest more, move to stronger areas or purchase bigger apartments. Our average sale price of an off-the-plan apartment rose to $963,000 last year," he told WILLIAMS MEDIA.
“There will always be demand for well-designed and appointed projects within good locations, close to amenities and infrastructure offering carefully considered floor plans that cater to the end buyer’s needs. These basic fundamentals have buoyed Melbourne’s property market and continue to get stronger.”
“It’s true that certain sections of the buying market have had to seek alternative methods to access credit, but that hasn’t diminished the appetite for good property. What we’re seeing is a slew of new lenders filling those gaps for first home buyers, downsizers and families who are still looking to buy new apartments or townhomes off-the-plan.”
Related reading:
The Block 2018: How The Gatwick defied Melbourne's cooling market
Melbourne's 'bridesmaid' suburbs offering a more affordable entry point into the market
Why vendors are tightly holding onto these Melbourne suburbs
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