Market Report 2023 October 30

The Election affect on the apartment market

Market Update

The Election affect on the apartment market

Market Update - November 2023

November 2023

The biggest change in purchasing sentiment I have witnessed after an election.

Market Report 2023 October 30

This is the biggest change in purchasing sentiment I have witnessed after an election. We have had seven multi-offers, multiple apartments selling over list price and all in the last 16 days. 

But when I look closely, new inquiry has gone up but not hugely and not enough to justify this activity.  

So what is going on? 

Buying an apartment takes time. It's a harder market to understand, and the purchase is more complex, so election or not, there are always buyers in the market and it is these buyers who are acting with much more urgency. 

Some were holding back till after the election, but most were meandering through the process as with it being a clear buyers market, there was no need to take action. Yes, we had a lot of tyre kickers floating around.

But since the election, it appears that they have all in unison, begun acting on the opinion of "I better buy now, or I will have to pay more later as prices are going up." 

And this is fantastic, and I am bouncing off the walls. (sorry, I love what I do) 

But the question I am asking myself is, will it last? 

How much fuel one puts in a furnace determines how hot it gets. So, I think the positive buyer sentiment will last, but there are levels.

In real estate, the fuel for the furnace is 'buyer inquiry', so I literally count how many buyers come through over all my listings. I call this my fuel meter. 

It has suddenly got very hot, and while it is a great opportunity for the next six weeks or so, I'm looking at the current level of buyer inquiry and this heat can't be sustained for long. Unfortunately, this isn't boom time yet.  

However, please note that this is early days, and it can change very quickly, but this is what I am seeing. 

So why are we not booming? 

Interest rates. They are too high and many people who want to buy property can't. The bank servicing test rates sit well above current interest rates, towards 10%, and for the average house price as a mortgage, that means $2,000 per week! 

So while, long term, we all know values will go up, and the current buyers are right, it simply can't go gangbusters till those test rates come down, which all the banks are saying won't start till early 2025. 

So what about values? 

Again, early days, but I'm seeing a much-needed recovery of values happening. So, that 5 to 7% increase in values I predicted pre-election, I'm now more confident at seeing 10% increase in the six months following the election.

The question is... I don't know if this lift will be short, sharp and then plateau, or a continued slow rise, or up and then back down due to lack of buyers' inquiry. That last one, I think not, unless stock levels increase, and right now, the number of apartments on the market is the lowest it's been in over 10 years. So we are hoping for not too many owners wanting to put their apartments on the market.  

Next Month. 

It's so exciting, so more of the same. Let's hope some more buyer inquiry comes in. Fingers crossed. 

And as always if you are interested in where I see your property sitting or going...

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      The Election affect on the apartment market