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A home in Porter Davis’ PDX range, designed for affordability.

Victorian housing affordability has surged to its best level since the turn of the century off the back of COVID-19.

A Housing Industry Association Affordability report released today shows the virus’ impact on home prices has combined with the city’s 2018-2019 market correction to reduce the number of typical incomes needed to buy a home from 1.51 in June 2018 to 1.29.

It comes as separate research from RPM Real Estate revealed single buyers have staged a massive comeback in the new homes market across 2020, accounting for about 35 per cent of sales this year compared to a 17 per cent average over the past decade.

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HIA chief economist Tim Reardon said a typical single income, which was now $89,000 in Victoria, hadn’t been enough to buy a home in the state since June 1998, but the state’s housing affordability index had improved 6.9 per cent in the June quarter of this year — in part due to price declines and in part because of improving wages.

Mr Reardon forecast better rental affordability in Melbourne, as a result of fewer homes being leased to tourists, coupled with limited house price growth of around 2 or 3 per cent across the next decade would give homeowner hopefuls some time to get into the market.

Houses at the Steadfield, Melton South development by Sphere Group are for sale at as little as $370,000.

However, the RPM Real Estate report shows those hoping to buy a new house are already raising their budgets as a surge in demand caused by the federal government’s $25,000 HomeBuilder grants chews through Melbourne’s most affordable blocks of land.

“Now all the affordable stuff is selling, the larger ones are being taken up as people are looking at it and weighing up their position and saying ‘I could take that bigger block, because that’s all that is there’,” Mr Kelly said.

Land at Villawood’s Redstone estate has been popular since sales commenced earlier this year.

The firm’s June Residential Market Review showed land sales under 350sq m declined from 41 per cent of the market in the first five months of 2020 to 35 per cent, and those sized from 350-450sq m were now accounting for 41 per cent of sales.

Homebuyer survey data compiled by the firm also revealed single buyer numbers in 2020 were double their historic average and about 10 per cent higher than they were in June 2019.

Mr Kelly said this reflected smaller blocks, as well as more townhouses, becoming more prevalent in new estates.

However, RPM’s preliminary August figures show a 60 per cent drop in inquiry for land sales as a result of Melbourne’s stage four lockdown.

Mr Kelly joined a growing chorus of building industry groups calling for an extension to the HomeBuilder scheme to ensure builders were able to spread more work into 2021, and potentially allowing another 1000 Victorians to access the funds. This would also avoid a crunch currently anticipated as a result of the grants bringing forward buyer activity.

Even larger homes, such as Porter Davis’ Sheraton Grange, are proving popular during the pandemic.

Porter Davis general manager sales and marketing Shaun Patterson said, while those who’d already bought land were pushing on, activity in August had been affected and agreed an extension would have a significant impact to industry jobs.

“It’s certainly slower in terms of demand since we have gone into the second lockdown,” Mr Patterson said.

He warned buyers planning to pursue the federal grants were running out of time as it could take up to 12 weeks to get a building contract finalised, even if they already had land ready to go. Those still wanting to take advantage of the HomeBuilder grant need to start speaking with a builder now.

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The post Victorian housing affordability best since 2000, single homebuyers up appeared first on realestate.com.au.

Hot property – 93 Greenwich Rd, Greenwich.

Sydney’s north shore suburb of Greenwich is a pint-sized residential location highly sought-after for its exclusive harbourside homes and apartments.

Commercial property beyond the Pacific Highway is scarce and it rarely comes up for sale.

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Until now. And this property at 93 Greenwich Rd, Greenwich, is an absolute cracker, offering a combination of retail, commercial and residential spaces that deliver five income streams.

Angela Perou, of Australian Domain Real Estate, is marketing the property via an expressions of interest campaign, closing at 3pm on Monday, August 31.

93 Greenwich Rd, Greenwich.

The hairdresser has a strong following.

A price guide of $5.9 million to $6 million has been set for the three-level property, and she said there was strong interest.

“It’s a wonderful property,” she said. “It’s quite a busy little hub there and very popular with the locals.”

The ground floor of the building is home to the Social Room Cafe and a hairdresser.

“The cafe is very popular with both locals, the parents and children associated with the nearby school and also, residents from the aged care facility across the road,” Ms Perou said.

“Visitors from neighbouring suburbs also come to enjoy the privacy and leafy village surroundings and atmosphere.”

There are two apartments in the complex.

The apartments are freshly painted with two bedrooms.

The hairdresser is equally popular with the locals, she said.

“The professional staff have built a wonderful rapport with locals and other patrons travelling from afar,” she said.

“The premises are impeccably kept and recently renovated with modern fittings and technologies.”

The basement is currently home to an engineering workshop and lockup garage, which are accessed via an automatic security gate.

Plenty of parking.

The cafe.

There are two two-bedroom apartments on the first floor, each with large balconies, fresh paint, new carpets, modern kitchens, internal laundries, parking and balconies.

Ms Perou said these were currently, residentially leased but there was potential to convert them to commercial office space (subject to council approval).

“The property is immaculate and has potential for future enhancement, which makes it an ideal investment,” she said.

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The post Rare commercial property in Greenwich comes to market with $5.9m-$6m guide appeared first on realestate.com.au.

946 Cudgewa Valley Road, Cudgewa answered buyers’ prayers.

Forget divine intervention or praying for a buyer, all it took to sell this country Victorian church in the middle of a pandemic was a polished renovation.

And maybe an act of Godden.

Elders Real Estate Wodonga agent Danny Godden said the 946 Cudgewa Valley Road, Cudgewa, property had gone through back-to-back renovations by two owners, converting it from an 1899 Presbyterian Church to a divine residence.

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The seller paid $163,000 for it part-way through the prior owners’ update in 2008, then polished the property over the next 12 years.

“The couple prior to them had started the renovation, but they have put the polish on it,” Mr Godden said.

Four buyers wanted to make the property their slice of heaven.

The split-level home uses a mezzanine level to take advantage of the cathedral ceilings.

He said her faith in the project had been rewarded, with the picturesque former church attracting about 8000 views online, four formal offers and a sale above the $350,000 initial asking price that went under contract on Tuesday.

Cosier than most churches in the area, it features a ground-floor living area beneath cathedral ceilings and brightened by arched windows.

The kitchen features pressed-metal splashbacks, while the main bedroom on a mezzanine level connects to an ensuite via an arched doorway.

Home chefs might find a little divine inspiration in the kitchen.

A small courtyard garden has been kept alongside the home.

A courtyard garden is hidden behind aged brick walls, while a studio on the property has been used for massage and beauty therapies.

The buyers came from Tumbarumba across the Murray River in NSW and might be praying for the Victorian border controls to be relaxed before they settle.

“They loved the unique nature of the property,” Mr Godden said.

“And it’s surrounded by magnificent farmland. You have no neighbours, except some stickybeak cows.”

The main bedroom on the mezzanine floor takes it up a notch.

It’s blessed with an ensuite through an arched doorway.

The underbidders might be waiting a while for a second coming, with property in the Wodonga area in high demand and low supply at the moment.

“We certainly have a lot of buyers missing out on properties,” Mr Godden said.

“The biggest struggle we have now is stock levels as people are holding on to homes for spring.”

He added that despite moving on from the church conversion, the vendor was confident the verdant stretch of Victoria is their promised land.

In this part of the world, a few kilometres makes them neighbours.

They’ve bought their next project, a weatherboard in need of resurrection, on the other side of the same road a few kilometres away.

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The post Cudgewa church conversion: Faith in church resurrection pays off appeared first on realestate.com.au.

There’s never been a better time to negotiate an affordable rental deal, with a glut of properties on the rental market during COVID-19. But a steady drawback in investor activity across Australia could see the tables turn in the not-too-distant future. 

The coronavirus crisis has forced many young renters to vacate their homes due to job losses and financial hardship. International border closures have also seen an influx in short-term holiday rentals become long-term residential listings, and an exodus of foreign students has left even more rentals vacant.

But while the oversupply presents an opportunity for tenants to broker a bargain, if mum-and-dad investors – who provide almost all rental housing in Australia – continue to wane, the country could be faced with a rental property shortage, and ultimately, a sharp rise in rents.

Overall buyer activity is up, but investors are dwindling

Despite the current economic environment, buyer enquiry on realestate.com.au, particularly from first home buyers, is up 70% since the pandemic hit in mid-March, which can be pinned to a stable banking system, record levels of stimulus and job losses that have, so far, primarily impacted young people.

But while enquiry is up overall, it has dropped by almost -30% in the investor segment.

The current renters market could quickly change if investors continue to pull back. Picture: Getty.

Investor activity has been trending downwards since the end of 2017 when the Financial Services Royal Commission began. While this was taking place, confidence took a further blow in the lead up to the 2019 federal election, for which investor tax incentives were a contentious policy issue.

Foreign investors have been further hit – depending on what state they wanted to buy in – with additional stamp duty, vacant property surcharges and challenges in securing finance.

Things looked to be stabilising for investors at the beginning of 2020 but then COVID-19 hit in mid-March, claiming the rental market as one of its first casualties.

Tenant woes have flowed through to investors

The rental market was impacted very quickly when the health crisis hit Australia, particularly because many young tenants lost their jobs due to widespread business closures, mainly across the hospitality and tourism sectors. Some tenants went to zero income overnight and had to wait two weeks for the Federal Government to announce its JobKeeper and JobSeeker schemes, designed to keep virus-hit workers financially afloat during the health crisis.

Nevertheless, many unemployed tenants were forced to leave their rental homes because they could no longer pay the rent, and vacant properties began to flood the market.

An influx of virus-hit tenants vacating their homes had led to a glut in rental properties. Picture: realestate.com.au/rent

Since then, we have seen improving conditions in the rental market. Search activity is now up more than 50% since the lows experienced in the early weeks of the health crisis, and are now up almost 15% nationally compared to the same time last year. Rental listings are no longer climbing and are now down 16% compared to the same period last year. The rapid rise in short-term holiday rentals becoming long-term listings has also slowed.

While this is welcome relief to some landlords that have been struggling to lease their vacant rental properties, there are parts of the rental market that remain very weak, which is problematic for investors in these areas.

Units are a problem area

While rental listings are no longer increasing across the board, the unit sector remains problematic with more than 16,000 more units for rent compared to mid-March 2020.

The biggest increases in rental listings have been in areas exposed to students or in suburbs largely inhabited by young people, with more than half the increase concentrated in just 10 suburbs.

Although we are seeing no evidence of mortgagee sales in these suburbs, some investors appear to be trying to get out with many of the suburbs seeing the biggest jumps in rental listings also seeing the biggest jumps in units for sale.

The outlook for unit markets in some areas looks even more bleak, particularly those in Western and South Western Sydney, which are now seeing the lowest views per listing across all rental listings on realestate.com.au.

These areas were problematic prior to the mid-March lockdowns but COVID-19 has exacerbated the problem. Compare this to some of the strongest rental markets, such as Mornington Peninsula, which are now seeing six times the views per listing.

Investors need encouragement

Right now, a lack of investor activity in the Australian property market isn’t a big problem because the rental market remains weak, with some signs of improvement. But problems are going to arise once the economy starts moving forward again.

If investors continue to pull back, the current oversupply of rental properties could very quickly reverse and the market would be thrown in favour of investors.

Encouraging investors back to market is likely to be hard work at the moment, but it could be achieved with better financial incentives from governments, including access to grants such as HomeBuilder as well as stamp duty exemptions.

The post It’s a renters market, but future price hikes loom appeared first on realestate.com.au.