Property market to 'stabilise'

Confidence is returning to the property market in Camberwell, where values have fared better than much of the rest of the country.

As eight consecutive interest rate rises and cost of living pressures drove down house and unit values across Australia last year, wiping out some of the gains made during the pandemic, Camberwell bucked the trend.

Locally, both home and unit sale prices rebounded in the final quarter of 2022. In the wider Boroondara council area, house prices increased about 4 per cent last year while unit prices increased about 5 per cent.

Just a week after the Reserve Bank of Australia’s first rate rise decision of this year, there was a significant shift in auction results.

“The beginning of the year was a bit of a shaky period where a lot of us didn’t know where we were heading to (with interest rates), but in early February we started to see a lot of auctions sold under the hammer,” said Mr Janssen Xiang, director and auctioneer at First National Real Estate Camberwell.

“In Camberwell and around Camberwell, there is limited stock on the market and cashed-up buyers want to buy and want to compete. So, we probably think the market is a good market to buy because there is less competition.”

Buyer’s agent Mike McNamara, of Strategic Buyers Agents, said plenty of off-market properties are being offered to buyer’s agents.

“Houses are basically at prices of a year ago but vendors are largely holding property off the market, waiting for the upturn before they list,” Mr McNamara said.

“In house sales, this has led to more buyers focusing on each home for sale, so clearance rates are rising.”

According to the Real Estate Institute of Victoria (REIV), in the fourth quarter of 2022 the median house sale price in Camberwell was $2.73 million – up 13.1 per cent from the previous quarter. In January, CoreLogic reported the median house price at $2.6 million.

“The areas in which we operate are sought-after areas due to factors such as prestigious schools, both private and public, and traditional 19th century period-style homes,” said Allan Chitty of Woodwards.

“There is an abundance of trees and green space as well as long-standing infrastructure with shopping and transport options.”

Similarly, units were up 11 per cent in the final quarter of last year, with a median sale price of $900,000, spending an average of 40 days on the market.

“The buyers in our areas are varied given the mix of large family homes, units and apartments. We find buyers trading up to larger homes while first home buyers are seeking units and apartments for stability over the rental market,” Mr Chitty said.

The outlook for the rest of 2023 is also positive. With the RBA expected to apply the brakes to its rapid run of interest rate rises, the property market and wider economy should stabilise as consumer confidence returns.

“I think we will arrive to a steady stage where everyone is okay with the interest rate and there is no fuss about it anymore,” Mr Xiang said.

“If there are only a few more (interest rate rises) like the RBA says, I think the market will be pretty stable soon.”

Mr Chitty expects to see limited growth in local property values in 2023 due to lower volume than normal market conditions, but not the declines forecast by some media outlets.

“For sellers, we would generally suggest considering the early part of 2023 rather than the latter and also pricing properties for sale at a realistic level from the commencement of the campaign,” he said.

Once interest rates plateau, Mr McNamara believes more buyers will be confident to make their move.

“Prices will likely stabilise mid-2023, if not already, and start the next upcycle later in the year,” he said.

“If banks’ mortgage rates are discounted later in 2023, the Camberwell house and unit markets will be one of the suburbs that lead the upturn. It is very difficult to predict the start of the upturn in prices in advance, but it is better for buyers to act early rather than too late.”

Janssen Xiang, director at First National Real Estate Camberwell

Mike McNamara, buyer’s agent at Strategic Buyers Agents