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Our Changing Island Market

Our Changing Island Market

By Chris McGregor 11 September 2020
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“Before influencing a market, first you need a good understanding of the state of the market”.

A “Real Estate Market” consists of may driving forces, supply, demand, government influence, banking regulations, buying and selling costs, local demographics, local infrastructure, transport, media exposure, etc.

Since February our local island real estate market has been influenced by the following:

  • Covid-19
    • Significant drop in Buyer interest in March and April
    • Double our average Buyer interest in May, June and July
    • Still high number of sales in August
    • The second wave of Covid has reduced interstate buyer activity
  • Grants – Building grant of $25,000 + First Home Owners $15,000
    • Since the announcement of the building grant in July, land sales have skyrocketed
    • First home buyers are few on the islands, but have been part of the land buying segment for a new home, as they will receive both grants.
  • State Election October 2020
    • Both Buyers and Sellers are always cautions prior to an election, with fewer properties coming on the market and few buyer enquiries in the months prior to an election
  • Stock Levels – Supply
    • Historically, our islands have had about two years’ worth of stock on the market, twice the amount of property on the market which would sell in a 12-month period. This has been the driving force keeping our prices low these last 12 years.
    • The amount of new listings for sale on the islands is dropping, this has been a consistent trend since March
  • Buyer Enquiries – Demand
    • Buyer demand was significantly down in February and March, increased April, then was incredible strong in May, June, and July, then still strong interest since then
    • Added buyer interest in the islands due to the perceived idea that we are a safe place to be, and still close to a capital city
  • Infrastructure
    • RCC and the State Government committing to additional funding to Green Sealing our dirt roads
    • NBN – online since July, making it easier for online businesses to work from home on the islands
  • Media
    • Adding to the buyer interest in the islands has recently received good media coverage in:
      • Courier Mail
      • Channel 7 News
      • Channel 9 News
      • ABC News

What does all of this mean to property Sellers and Buyers?

  1. The combination of Covid-19, media hype of the islands, the NBN and the further green sealing of our roads is together generating additional buyer interest in our islands. This has also created uncertainty with some property sellers, reluctant to list property for sale, which is a normal trend prior to an election
  2. Demand for land has been much stronger than demand for houses, since the introduction of the $25,000 Building Grant.
  3. The available land for sale on the islands is dropping at twice the rate of house supply, a lot of our cheaper blocks have been selling first, reducing the entry price to the islands
  4. We are seeing more buyers missing out on a purchase, for either not acting quickly, or by making a lower offer, which is then out bid by another buyer more keen to own the property.
  5. We are at the cusp of seeing price increases “IF” the demand for the islands continues AND the slowing of new listings coming on the market remains slow.
  6. The new few months, prior to the State election, I would expect the market to stabilise, with increased both buyer and seller activity in November and December.
  7. If we are going to see an increase in sale prices this year, it will be with well-located land prices at the lower end of the marker and waterfront land.

If you are thinking of selling in this Market, talk to the agent who understands how to read a market, then efficently gian buyers attention within the marker, to sell your property sooner for the best possible price.

“Before influencing a market, first you need a good understanding of the state of the market”.

Chris McGregor 0420 555 997

http://www.bayislandsproperty.com.au/author/chris-mcgregor/

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