The Melbourne property market is an ever-changing scene. Who’s buying? Who’s selling? What type of properties are selling? What type of properties aren’t selling? What do buyers want? What is deemed affordable? Where is the housing market moving? Some of these dynamics are moving swiftly, while others take years to change. To stay ahead in the marketing game, it’s key, as copywriters, that we analyse these factors to give our copy appeal to the trends in buyer movement.
Buyers
Which buyers are buying? First home buyers? Second time buyers? Singles? Couples? Young families? Older families? Downsizers? Developers? Overseas investors? Local investors? Factors like interest rate hikes and drops, tax changes and population growth rates all have an impact on which categories buy when. While real estate agents depend on the well-publicised ‘five D’s of real estate’ – death, debt, divorce, downsizing and diapers, to keep the market churning, the peaks and troughs are determined by the changing dynamics of tax laws, international market trends and political agendas, like the announcements of Federal or State Budgets, elections, etc. that build confidence or reduced confidence in buyer movements.
Land Tax on the Investor Market
In the 2024, many investors have been hit with the Victorian Government’s new Land Tax, which is covertly also known as the Covid Tax. This new Land Tax has increased the cost of owning an additional property to your principal place of residence, changing the game post from Land Tax applying to a property if it’s land component was more than $300,000 to applying to all properties which is not a principal place of residence with a land component of $50,000 or more, with a minimum annual cost of $975. For many, the land tax component is accepted as an additional mortgage payment for the year, for others it is the equivalent of several additional mortgage payments as the tax goes into the thousands. The new tax has brought the Victorian investor market down, with many investors choosing to sell their property and invest their money in other assets.
Land Tax on the Developer Market
Developers too have been hit hard with the land tax changes. However, they have also been hit with huge increases in supply and labour costs over the last 4 years, shortages of qualified trades and other state imposed taxes, including vacant residential land tax or an absentee owner surcharge as well as development costs for planning and permits. All these additional costs have reduced the developer’s ability to make a profit. Many builders and developers have gone bust over the last 2-3 years, including some of the giants in the industry, like Porter Davis Homes. The plus for developers now, is that local government authorities are fast-tracking development approvals to cater for the need of housing in our state, which means developers have less holding costs (interest, etc) while they wait for the paperwork to be approved.
Buyer Thought Processes
If developers are going bust because of the cost of trades and supplies, then buyers aren’t wanting homes that need renovating. They want properties that have a newness to them, where they can walk in, bring in their furniture, their pot plants and knick knacks, and be happily at home. Buyers are prepared to pay a premium to buy renovated. Why? Because with interest rates high, there are many factors to consider: Are they buying at the top of the market so there is no room to do any further renovations, knowing that renovations are going to be expensive? Will interest rates continue to go up making it difficult to get additional funds for renovations? Or will they be comfortable in the property now, and wait for any future interest rate decreases to give them renewed confidence to renovate? Buyers who are buying property as their principal place of residence, are assessing if the location, the quality and the space will suit their needs now, and if the price is right, they go for it.
As copywriters, we ensure that we highlight the trends in property, the waning trends that are still popular and bring out the characteristics of retro or vintage homes that enhance homes that only need some cosmetic improvement, like a coat of paint or new floors to make it suitable for today. We paint the picture of where improvements could be made, like ‘room for a pool or studio’ to ensure the property attracts those who want space for some lifestyle enhancements. If a home is condemnable, then we look at the surrounding streetscape and neighbouring properties to uncover what may be possible in a new build or development. We also delve into the online tools including the REA platform, VicPlan and Land.vic.gov.au to give us greater insight into what may be possible on the site.
New Trends to cater for the Victorian Housing Crisis
At Real Copy Right, we are constantly looking at new trends and laws being approved, with the most recent including a small second dwelling, up to 60 square metres, can be added to a property without a planning permit, if the land is 300 squares or greater and not subject to flooding, environmental or special planning controls. They are still subject to building permits. What this means, is that home owners can keep their family close or section a section of their land to create additional income by putting a one bedroom self contained dwelling on their property, which adds value to their property. Most of these units are premade offsite and craned into a backyard with only the need of an electrician and plumber to make it an operational home. This helps create independence for young family members, part dependence for older family members, and an extra income of $250-400 a week for those needing extra income to keep their property. On a social level, it assists the government with reducing the urban sprawl, creates rental homes for singles/couples when there is such high demand and makes people feel connected. The negative: you won’t be able to subdivide your property to sell the second dwelling separately.
Changing Energy Needs
Energy efficient is also high on buyer agenda, again forced through government agenda. As we move away from gas appliances in homes, to make way for electric appliances powered by renewable energy including hydro, solar, wind and nuclear, and move away from coal created electricity and wood fires for heating, we find more buyers keen to take note on other energy efficient elements of the home. This could be the solar passivity of the home (orientation, use of eaves, pergolas and natural shade to allow sun to penetrate the home). This could be double glazing and insulation that ensures the home stays temperate all year round. This could be harvesting your own energy and resources – solar panels, solar hot water, water tanks, hot water heat pumps (for pools and hot water), vegie gardens, fruit trees, composting. Buyers are wanting to look after the world and do their bit for the environment, so our copy has changed to reflect these enhancements, while we understand that in new homes, so of these changes are mandatory, they are an added bonus in older homes.
As part of our processes, we regularly speak to agents, developers, vendors, buyers, renters and investors, we watch the trends, check the clearance rates and stay alert to any council and government changes. By keeping on top of the state of play, we are able to create more distinction in our copy and bring extra appeal to the key buyers.
References:
https://www.premier.vic.gov.au/making-it-easier-build-granny-flat
