Your Investment Magazine recently ran an article highlighting insights into investment and property in Victoria. Below is a snapshot of what was discussed with
Marty Fox
.
- Market Trends and Strategies:Marty Fox, WHITEFOX co-founder and CEO, emphasises the increasing popularity of fully renovated turnkey family homes in the Victorian property market. He attributes this shift to highly inflated construction costs negatively impacting properties needing renovations. The recent rate rise in November is expected to intensify pressure on homes requiring renovations due to strained consumer spending.
- Victorian Property Market Overview:Despite facing thirteen interest rate hikes between May 2022 and November 2023, the Victorian property market has maintained balance, with clearance rates hovering between 60% and 70%. Participants in the market have adjusted to the new cost of borrowing, reflecting resilience in the face of interest rate increases.
- Auction Dynamics:Auctions are experiencing decreased interest, with an average of one or two bidders per auction, compared to the higher numbers seen earlier in 2023.
- Property Values in Melbourne:As of the end of October, Melbourne's median house price was $937,736, while the median unit was $615,022. The city's property values are approximately 2% higher than the same point in 2022 but still nearly 4% lower than the peak in March 2022.
- Investment Opportunities Outside Melbourne:With the acceptance of remote work due to COVID-19, opportunities have emerged in rural and coastal areas of Victoria. Rural properties and coastal homes have experienced a surge in value, with some properties sitting 15% to 30% below their peak values of two years ago.
- Changing Taxation Environment:Investors in Victorian property need to consider the changing taxation landscape. From 2025, a tax on vacant land will expand from metropolitan Melbourne to the rest of the state. Investors renting out properties on short-stay platforms will face a 7.5% levy, leading to a "mass sell" across investment portfolios.
- Challenges and Considerations:Property owners are facing unforeseen future overheads due to the changing taxation environment, prompting contemplation about the viability of holding onto properties. Mr. Fox highlights the impact of inflation, interest rates, and pressure from employers on the attractiveness of rural and coastal properties as the best buys in the market.
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