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Treak Real Estate Property Update: February

Welcome to the Treak Real Estate Property Update: our monthly round-up of news from the Sydney and national property markets, as well as what’s been happening here at Treak!


How is 2021 shaping up?

Now that we’ve found our feet in 2021, we’re beginning to get a sense of what the property market might serve up this year. And ‘up’ is the operative word.


Continuing on from a strong finish to 2020, average Australian house prices are up 1% on pre-COVID levels, and many wise heads are predicting double-digit increases in 2021. The reasons are many and varied: continued stimulus, stronger economic growth expectations, record low mortgage rates and confidence that will come from the vaccine rollout.


Another factor is that the listing numbers on platforms such as realestate.com.au and Domain are well below the averages set in previous years, and the natural consequence is an upward pressure on housing prices. Low supply leads to high demand, which in turn drives prices up. Another popular prediction is that houses will continue to perform better than units due to work from home arrangements.


According to CoreLogic, first home buyer numbers are above average across every state and territory, lured by the twin temptations of ultra-low interest rates and government support. This is likely to subside over time however, as affordability decreases and investor activity increases. For the moment though, wholesale broker AFG has declared that investors make up just 21% of its loan applications, the lowest percentage since records began in 2013.


Rental tip of the month: offer a floor plan

Wondering why renters aren’t showing much interest in your property? It could be that you haven’t given them a clear floorplan.


Floor plans are one of the most effective yet overlooked property marketing tools. A clear, professionally drawn floor plan gives a potential renter a better sense of your property and what it will be like to live in. They can get a good idea of the flow of the home, and more easily imagine themselves in it.


A good floor plan can greatly increase your pool of possible renters. People who can’t make the inspection, including out-of-town renters, are able to get an understanding of the space. They can even use it to map out possible furniture placement!


Our tip: If you’re going to spend money marketing your rental property, use a chunk of it to produce an immersive floor plan - perhaps even a 3D model that enables virtual walkthroughs.


Kind words from customers

This week’s featured review comes from a landlord Silvia Mircevski. Thanks so much for the kind words Silvia!


Prior to listing with Treak, I had a flat that sat empty for months (from 23rd July 2020), even though I had my regular agent listing it, ready to show it every week and by appointment. I had dropped the rent repeatedly.


When I approached Renae from Treak, I didn't expect fast results because it was December. But she immediately gave me some great insights and made excellent suggestions for how to best market the property. While these things fostered a sense of her competence, I still could not have anticipated such a favourable result - she had prospective tenants lined up VERY quickly (yes, multiple!) and had sealed the deal with a wonderful new tenant by the end of the year, and all at a rental rate I was much more comfortable with!


It's wonderful to be dealing with someone so trustworthy. In fact Treak has been so impressive on so many fronts, I will actually be migrating all my Australian properties to them for management. I highly recommend Treak.


Check out the full review here!


TREAK PROPERTY MARKET UPDATE

What has the property market been up to recently? This month let’s take a moment to compare the fortunes of Australia’s two major markets - Melbourne (fresh from a five day lockdown) and the slightly more stable Sydney.


Property values


The property market has started to find its feet in the last six months, as a bit of post-COVID confidence has taken hold. Given their very differing fortunes over this period, Melbourne and Sydney property values make for interesting reading:


Sydney

  • Houses: +2.4%

  • Units: -2.3%

  • Forecast: Sydney property values could increase by 8.8% in 2021 (per ANZ)

Melbourne

  • Houses: -0.3%

  • Units: -0.1%

  • Forecast: Melbourne property values could increase by 7.8% in 2021 (per ANZ)


Auction Clearance Rates

A sign of the strength of the market, auction clearance rates have surged in recent times.


Sydney


Sydney’s auction clearance rate hit an astonishing 88.7% last week, a number not seen since 1997. The common factor both now and then was low interest rates.

Melbourne


A strong clearance rate of 76% was recorded in Melbourne. 698 properties were scheduled for auction the week of the recent lockdown, significantly more than the week prior (529). It is yet to be seen what effect the lockdown has on confidence.


Regional property markets and trends


If you’re on the hunt for a safe property bet, look no further than regional markets, particularly those within a two hour drive of capital cities. Having risen three times more than the city market in recent times, regional markets are increasingly being seen as the blue chip option.


Remote working arrangements may affect the popularity of regional markets. While more people than ever are looking to work from home, a recent Boston Consulting Group survey found approximately half wanted to return to the office at least part time. The result? While there will certainly be a wave of seachangers and treechangers, the numbers may not be as high as you might think.


Thanks for reading

And that’s it from us for the month of February! Thanks for reading, and be sure to forward our newsletter onto any interested friends!


Until next time,


Renae Treak




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