- Traditional property valuation measures and sales performance no longer give an accurate prediction of property sales prices, real estate agents say
- RT Edgar director Mark Wridgway says in the Victorian market, dollar per square metre rates has been “thrown out the door”
- Preston Rowe Paterson Australiasia national director Neal Ellis says a new focus on lifestyle, thanks to COVID-induces lockdowns, have changed the market
- “Prices are even higher than before we went into lockdown,” says Ray White TRG principal Gavin Rubinstein
Traditional property valuation measures and sales performance no longer give an accurate prediction of property sales prices in many regions of Australia, argued a panel of experts during a recent AltX webinar.
“The prices that were being achieved in the middle of 2020 are just not relevant in the current climate,” JPM Valuers and Property Consultants director Jason Matigian said.
“We did a valuation in Manly recently. The house next door sold for $4.1 million in May or June 2020, so we put our thinking was around $4 million on the property which was similar. It sold for $6.3 million. We see this across the eastern seaboard in Sydney and even once we go to the middle and the outer rings.”
RT Edgar director Mark Wridgway said in the Victorian market, dollar per square metre rates has been “thrown out the door”.
“From September 2020 to now, some places across the peninsula have experienced an average of probably 30% to 40% growth,” he said
“And in some of those key assets, those generational properties on the cliff top… some of those have grown 50% to 60%.”
Unique circumstances have led to the current market dynamic. With cheap borrowing rates, limited availability, and growing appreciation for greater space, prices have soared in most areas throughout the country, and they show no signs of slowing down, even with the latest lockdowns.
“Prices are even higher than before we went into lockdown,” Ray White TRG principal Gavin Rubinstein said.
“It’s just gotten more bullish and more aggressive because of low interest rates and lack of supply. I’ve never seen the market so tight in terms of options for people to purchase.
“A lot of people now are putting a lot more value on having and wanting space, so with a lack of lifestyle assets – something with a view or close to the beach where you can really improve your lifestyle – the numbers people are paying are insane.”
Preston Rowe Paterson Australiasia national director Neal Ellis said the new focus on lifestyle, thanks to COVID-induces lockdowns, have changed the market.
“If you’d asked me 20 years ago where you should invest, I never would have said go to the outer areas and have a look at what you can buy.
“[I would have suggested] buy something in a city that’s smaller at the same price point and you get better capital growth. But I’m not sure that applies anymore.”