March showed an upswing in activity generally and encouraging sales volumes in the central city apartment market, says Director of City Realty Group, Daniel Horrobin. Sales of all apartments in the CBD were 30% up on the previous month of February.
He says: “However, now is a time for cautious optimism rather than bold predictions, given OCR increases and tax deductibility rules continue to bite.”
Stock levels of apartments available to purchase in the CBD remain steady, hovering around the low-to-mid 600s. Investors continue to drive hard bargains, ever conscious of buying at the right price to achieve a positive return on investment.
“Our auction pipeline over the coming months remains healthy and properties sold by auction are continuing to clear far more efficiently than those sold by other methods.”
Many recent auctions have drawn multiple bidders, delivering transparency and competitive engagement which assists sellers to make prudent decisions.
Increasing demand for rentals has shrunk the pool of what is available. Mid last year there would typically be around 600 city apartments available to rent, whereas there are currently around 350 rentals available.
This increased demand has been driven by both students seeking accommodation and professional people seeking to rent, having returned home from overseas now the borders are open.
This combination of increased demand and shrinking pool of available rentals is seeing unprecedented numbers attending viewings.
“It’s not unusual currently to get 30 to 40 people turn up to a rental viewing, and that’s not necessarily for flash apartments,” Daniel says. “And the large majority of these are very good applicants – professional people with good references.”
This strong rental demand may well logically translate into increased apartment values with time, although the property market has defied logic in some areas in recent years.
“With further OCR announcements imminent (the next one scheduled for the 24th of May) and a General Election in the wings, there may still be some hurdles to navigate but we remain hopeful the light we can see is the end of the tunnel,“ Daniel says.
Ray White’s licensed agents are well versed in market dynamics and are ready to help both sellers and buyers on their property journey.