The Melbourne suburbs where house prices are falling fastest right now
Woodards Real Estate director Brad Teal said the Essendon area had been suffering from a lack of high-end stock. This was because local vendors did not feel like the rate cut of 25 basis points would stimulate the market enough to achieve the prices they wanted for their homes.
“One interest rate drop of 0.25 per cent does not make a market,” he said. “[Buyers] can re-enter the market with not much more than $800,000 today, but $880,000 in September.
“There’s a lag of six to eight months of interest rate drops for the market to reflect it.”
Cautious vendors were holding up the local market, Teal said.
“There are many vendors who would love to sell today … You get these blockers in the marketplace that are stopping the domino effect.”
First home buyer Hayden Morris said he brought forward the purchase of his Blackburn apartment, expecting the market to pick up and erase any benefit he’d gain from waiting longer.
Hayden Morris just bought his first home in Blackburn, and said the rate cut prompted him to purchase. Credit: LUIS ENRIQUE ASCUI
“I was definitely looking to buy, but looking at a six-months-from-now kind of time frame. But the market conditions and government schemes … made it possible sooner than I thought it would be,” he said. “I was going to try to save an extra maybe $10,000 to $15,000 in that time and with the rate cuts, that $10,000 to $15,000 is probably going to be gone because prices are going to go up.”
Whitehorse west, the statistical region that Morris bought in, had the largest fall in unit prices over February. The median value fell 2.5 per cent to $730,000.
Morris was pleased to be able to knock a bit off the asking price for his two-bedroom unit. “I’m stoked to be honest,” he said. “The place itself really suits me and my lifestyle. It’s close to the station which is really good for work and it’s got an outdoor area to entertain in.
“I thought the price I got it at was competitive.”
Axton Finance broker Luke Rowland helped Morris to get the mortgage for his new home. He said buyers were trying to take advantage of slack prices in some areas.
“People are wanting pre-approvals yesterday, and they’re making decisions and wanting to go. And with certain areas like Hayden’s, there’s been a fall in unit prices and that’s probably why he was able to snap it up for a good price so quickly,” he said.
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“It’s still a buyers market, it might not be as strong as it was for buyers as it was a few months ago, but the urgency has come back.”
CoreLogic’s Owen said it was unclear if the uptick in prices would be sustained. “There is that initial sugar rush of that cash rate cut … even though we’ve seen a strong inflection point and a boost to consumer sentiment, there are questions about how long it can last, especially if we don’t see another rate cut in April,” she said.
