The price of property, as with everything else, is determined by the relationship of supply and demand. Since the peak of the inner city market in 2013, supply has significantly increased whilst demand has continued to decrease.
This is evident when reviewing the peaks and troughs in supply (number of listings) over recent years:
Lowest Point - March 2013, at 270
High Point - March 2015, at 536
Supply rose by a staggering 98%, roughly doubling the amount of properties buyers could choose from just 2 years before. It’s not surprising how much the value of apartments changed over this period.
We monitor the supply numbers closely and while it remained relatively stable over the 2015 and 2016 year at just over 500, it has reduced significantly in recent months to just 369 advertised listings in the June quarter. This represents the lowest level since late 2013, and a decline of 32% this year.
This change in market conditions has started to have a positive impact. In addition to lower supply, demand from buyers for apartments is up, with many not being able to find something suitable. This combination has stabilised pricing and in some cases we’re seeing sale prices going up. A good example of this is a 2x2x1 on Hay St which we recently sold for $484,500 and in late 2016 the exact same design sold for $450,000, an 8% increase in price.
Typically, as the warmer months of Spring and early Summer arrive, we’ll see a run of new properties hitting the market to take advantage of increased buyer activity. As it stands, there is a genuine shortage of certain apartment types, so if you are considering selling in the short term, now may be a great time to act on these unusually favourable conditions.
Alternatively if you would like to receive our quarterly Performance Reports for your complex, contact me and I will add you to our owner group who currently receiving this.