6th July 2023
APOLLO BAY- HERE AND THERE
END OF FINANCIAL YEAR REPORT
As the 22-23 financial year has now come to an end, we reflect on what has been an extraordinarily interesting 12 months for the Real Estate Industry.
The previous financial year saw phenomenal growth across the region as a result of the pandemic, with an average 42% increase in median values. Over the past 12 months, a re-correction in the housing market post-COVID, rising interest rates and buyers returning to the city led to plunging Apollo Bay house prices. PropTrack data released in May showed Bay house prices had dropped by 8.5 per cent in the past year, with a quarterly drop of 4.1 per cent. Apollo Bay’s housing price drop was the fourth highest in regional Victoria, behind Ventnor, Queenscliff and Marong. The median price was $979,743 in March this year.
Sales generally reflect a relatively positive market, however the transactional activity over the last 4 quarters reflects a very different story. A total of 17 transactions in Apollo Bay alone, in the first quarter of the financial year totalled $19.8 Million, $18.4 Million in the 2nd quarter, $25.3 Million in the 3rd quarter and just $13.19 Million in the final quarter of the 22-23 financial year. The corresponding final quarter totals last year were almost triple, totalling in excess of $35 Million.
According to CoreLogic’s Hedonic Home Value Index report, Australian housing values moved through a fourth month of recovery with CoreLogic’s national Home Value Index (HVI) rising 1.1% in June, decelerating slightly from the 1.2% gain recorded in May. Since finding a floor in February, the national measure of housing values has gained 3.4%, however, the market remains -6.0% below peak levels recorded in April 2022. That is the equivalent of the median dwelling value still being -$45,771 below a peak of $768,777.
Every capital city except Hobart (-0.3%) saw dwelling values rise in June, Regional housing values have also trended higher, albeit at a slower pace relative to the capitals. The combined regionals index also recorded a fourth consecutive month of growth, taking housing values 1.2% higher than the recent low in February.
So, what does all this mean and how healthy is the market?
Inboxes and media are filled with conflicting reports, and deciphering the reality is understandably difficult. Statistics show these reports are based on figures from about six months ago. That is the time it takes for a property to be listed, sold, settled, and to make its way into public records. Rear view data is not useful for making future decisions.
Although the recovery trend has become entrenched over the past four months, the outlook for housing values remains uncertain amid an expectation of higher interest rates, weaker economic conditions and stretched household balance sheets. The trajectory of interest rates will be a critical factor in the housing market’s performance.
The coming months will see an unprecedented peak in the number of fixed rate borrowers refinancing to significantly higher mortgage rates. The RBA has previously estimated that 880,000 fixed rate mortgages will expire in 2023, refinancing from mortgage rates around 2% to higher than 6%. As more borrowers are exposed to higher debt repayments, alongside negative real income growth and higher cost of living pressures, it’s logical to expect mortgage arrears will continue to rise through the second half of the year.
Higher interest rates also imply credit will be less available, especially considering new mortgage borrowers continue to be assessed at a rate three percentage points higher than the origination rate. Additionally, lenders have become more cautious, with further reductions to high debt-to-income ratio and high loan to-valuation ratio lending. Another key risk for housing conditions is the potential for a rise in advertised housing stock.
Despite current concerning trends, Apollo Bay is the only coastal town with future subdivision, we’ve got plenty of blocks for sale, something other coastal locations cannot offer. The long-term growth for Apollo Bay looks secure because our compound growth over 10 years is always consistently strong. It’s always worth remembering that real estate is a long-term investment and investing in lifestyle destinations like Apollo Bay will be a strong investment, property values can change quickly!
To really know what is going on, it is best to have advice based on forward looking data and focus on the precise attributes and locality of the individual property. It really is invaluable knowing the up-to-date trends, and more importantly, what lies ahead over the next three to six months before deciding to stay or move.
That’s where we step in. Our agents have years of experience working in these markets and are in a position to have the clearest understanding of what listings are coming to market and at what price. Knowing the depth of buyers and the potential competition three to six months ahead is vital before making any decisions, so if you are thinking of selling, why not take advantage of our specialised advice, accurately tailored to a specific property.
Kind regards,
Darren Brimacombe
For and on behalf of the entire Great Ocean Road Real Estate team
APOLLO BAY- WHAT’S ON
APOLLO BAY- QUOTE OF THE WEEK
“It is never too late to be what you might have been.”
CURRENT LISTINGS:
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