Hot property market endures

The surging Camberwell property market shows no signs of a slump this season.

Experts say a combination of robust buyer demand, low interest rates, and limited stock is creating the perfect storm to fuel price growth. The conditions are painting a rosy picture for Camberwell property owners.

Latest Real Estate Institute of Victoria (REIV) data revealed median house prices in Camberwell jumped 16 per cent to $2.44 million during the March quarter, against a Melbourne median increase of 8.8 per cent to $1 million.

The bullish growth saw Camberwell rank as Melbourne’s 14th best-performing suburb for the period, with Toorak, Hawthorn, Bulleen, Kew and Wantirna South taking out the top five positions.

It’s a similar story for Camberwell unit prices, which ballooned 13 per cent to $880,000 compared to a more sedate 4.8 per cent increase to $673,000 Melbourne-wide.

Woodards Camberwell director Jason Hearn said buyer demand had gone through the roof in recent months.

“It’s a cliche, but it’s hot,” Mr Hearn said.

“There’s a distinct lack of supply of properties, and buyers are as energised as they’ve ever been, in part due to low interest rates.

“Buyers have a lot more capacity and are prepared to pay more and that is pushing up prices.”

Looking forward, he predicted prices would stabilise over the next few months.

“Potential sellers are seeing the results achieved and are more positive about going to market,” he said.

“As we see an increase in supply as we head into spring, the extra stock will have a stabilising effect on the market.

“I don’t think we’ll continue to see the double-digit growth we’ve been seeing.”

Janssen Xiang, director at Camberwell’s First National Real Estate Janssen & Co, said the property prices of early 2021 took everyone by surprise.

“No one could have predicted the price boom of earlier this year,” Mr Xiang said.

“During lockdown last year, a lot of buyers held off, so after lockdown they flooded the market.

“Some of the prices have gone beyond what prices were in 2017.”

Mr Xiang said it was difficult to predict what the rest of 2021 would look like, due to the uncertainties of the pandemic.

“We don’t know what will happen in the next six to 12 months,” he said.

“If there’s another lockdown, we’ll see people waiting again, and that will see the market drop by 10-15 per cent.”

Long term, the Camberwell property market was “very stable” compared to more volatile areas reliant on overseas buyers, he said.

“Camberwell has great schools, and it’s not as dependent on the overseas market, so it’s much more stable,” Mr Xiang said.

“Compared to other areas, like Kew and Hawthorn, Camberwell still has affordable pockets as well, towards the Burwood end of the suburb, where you can still get a house for under $2 million.”

Mr Xiang said prices were beginning to level out, but there was still plenty of interest, largely fuelled by historically low interest.

“Whereas we were seeing prices go 20-30 per cent over reserve, lately there have been a few more pass-ins, which indicates things have settled a little bit,” he said.

With record-low interest rates expected to continue until 2024, the Camberwell property market looks set to enjoy an extended period of growth.

Reserve Bank of Australia governor Philip Lowe said the board would not increase the cash rate until actual inflation was sustainably within its 2-3 per cent target range.

“For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently,” Mr Lowe said.

“This is unlikely to be until 2024 at the earliest.”