Month-In-Review-March-2015
Month-In-Review-March-2015
Month-In-Review-March-2015
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<strong>Month</strong> in <strong>Review</strong><br />
<strong>March</strong> <strong>2015</strong><br />
are expected to remain steady throughout <strong>2015</strong> as<br />
building companies offer competitive house and land<br />
packages.<br />
Warrnambool<br />
As a result of the latest interest rate cuts by the<br />
RBA, the Warrnambool property market should<br />
respond positively, especially in the mid-range (under<br />
$350,000) sector of the market which accounts for<br />
the majority of current transactions. This sector<br />
comprises investors who will take advantage of the<br />
lower interest rates on offer as well as first home<br />
owners and young families who generally have a<br />
higher loan to value ratio. Top end residential and<br />
rural lifestyle properties will be the least affected<br />
sector mainly due to the security of most purchasers.<br />
Horsham<br />
When looking at general market levels of demand<br />
and supply, values and vacancy in Horsham and<br />
the Wimmera, the recent interest rate cut is likely<br />
to go relatively unnoticed. But under the surface<br />
the recently subdued market was displaying signs<br />
of softening with a reduction in sales numbers and<br />
very little demand for properties over $500,000.<br />
The recent interest rate cut is likely to improve<br />
demand from those prospective buyers who have<br />
been holding off which in turn is likely to steady<br />
the demand and number of market transactions<br />
at the current rate. The number of transactions of<br />
residential homes is likely to remain low in coming<br />
months with limited price movement. The first home<br />
buyer market in the $200,000 to $300,000 bracket<br />
is likely to be the strongest performing market in<br />
coming months with some renewed interest from<br />
investors as a result of the rate cut.<br />
Mildura<br />
The residential market in Mildura started to<br />
move up in early 2014 after a prolonged period<br />
of stable prices. This upswing is attributed to<br />
improved confidence in the economy combined<br />
with a low interest rate environment. The recent<br />
announcement of a further interest rate cut is likely<br />
to maintain the existing momentum.<br />
For owner-occupiers the impact of the rate cut is<br />
considered minor. The average home loan required<br />
to purchase a dwelling in Mildura is lower than<br />
in capital cities and while buyers will no doubt<br />
appreciate the peace of mind gained from the cut,<br />
the financial impact of a 0.25% variation is relatively<br />
minor.<br />
The interest rate cut may however provide additional<br />
impetus to investors, particularly those who<br />
become disenfranchised with the low interest rates<br />
available for term deposits. Returns from residential<br />
investment properties compare favourably with<br />
those available from more passive investments and<br />
it is considered likely that some new investors could<br />
enter the market.<br />
Homes in the $225,000 to $350,000 range and units<br />
in the $150,000 to $225,000 range are considered<br />
to provide the best combination of rental return<br />
and ease of management and we would see these<br />
segments as being the most likely to come under<br />
investor attention.<br />
Homes in the over $350,000<br />
bracket are more likely to<br />
appeal to owner occupiers and<br />
are considered less likely to be<br />
impacted by the move in interest<br />
rates.<br />
Residential<br />
29
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