With restrictions starting to ease, Melbourne is going a little “ballistic” as the pent-up demand for property explodes, a managing director has observed.
Randolph Clements, managing director at Raine & Horne Victoria, said: “It’s like we’ve been holding back a herd of stallions who, once released, took off.
“Vendors have been held back from having inspections, while buyers have been unable to attend open homes.”
Mr Clements said low interest rates had buyers and sellers primed for an active 2020 at the start of the year, then COVID-19 halted all plans.
People who sold at the start of the year on 90-day contracts didn’t have time to buy anything.
“People in this situation are leading the charge for Melbourne properties. It’s a case of the property wave goes out, and the wave will come back in,” the managing director highlighted.
As a result of the pent-up demand, prices are rising rapidly, with properties appraised at $1.8 million a few months ago now selling for $2.2 million, Mr Clements observed.
It has led him to predict: “This level of sales activity in Melbourne will continue in 2021, with average price growth of 8–10 per cent a distinct possibility, thanks to low interest rates and stronger economic confidence.”
Despite the boom, Mr Clements believes the inner suburbs of Melbourne do represent good value right now. Ironically, these suburbs were also the areas most impacted by the pandemic.
“It’s something of a contrarian view. However, the inner suburbs that have been most impacted by the pandemic should start to bounce back later in 2021 and early 2022 as buyers return from regional Victoria as fears about future COVID-19 lockdowns abate as more vaccines are produced,” he outlined.
Overall, the director said current levels of activity will continue.