The question on everyone’s lips in 2019 is whether real estate prices will go up. Some suburbs of Melbourne have seen a steady decline in house prices over the last twelve months. These are areas affected by the withdrawal of predominantly foreign buyers from China in suburbs such as Box Hill, Balwyn, Doncaster, Glen Waverley and the surrounding suburbs. Popular among Chinese buyers, these areas experienced a surge in house prices across several years, now equally matched by a decline in house prices, helped by the Chinese government’s tightening of monetary movement out of China, as well as the Royal Commission and tighter lending in Australia. The market has stabilized, corrected itself, softened, slowed and adjusted. Educated buyers are aware and informed as they explore the market actively comparing recent sales and asking prices for properties on the market. Less active is the hopeful vendor who holds onto yesterday’s price and their list of needs and wants. They ask themselves how long they can wait before house prices go up again. Buyers are also contemplating how long they should wait to purchase and whether prices will decrease further. What have not changed are vendor and buyer behaviours. Vendors want to sell for a high price, driven by their needs and sentimentality which often fuels their belief in their home's value, while buyers are looking for their next home and want to avoid paying above the current market value. Real estate prices are unlikely to go up in 2019 unless the foreign buyer, predominantly the Chinese, returns to our market. This is dependent on the Chinese government easing their control of money leaving their country, which is unlikely. Our local banks would also need to loosen their lending criteria for local and overseas borrowers. However, this is also unlikely given the recent Royal Commission’s outcome. The reality is that if you sell and buy in the same market, a price increase in real estate will only mean that while you are selling for a higher price, you are also buying for a higher price. If prices do not increase, you may be selling for a lower price than a year or two ago, but you are also buying for a lower price. Ultimately we can only really ask ourselves whether by selling and buying, regardless of the current market value, will we improve our lifestyle and achieve more fulfilling happiness and well-being or will we be better off emotionally, physically and financially by staying put? We are always happy to chat so give us a call at First National Balwyn North on 8595 2481 to discuss any real estate matter.
Will Real Estate Prices Increase?
Tuesday 16 Apr 2019