The Melbourne winter property market has started strongly amid increasing buyer demand, solid population growth, low interest rates and a decrease in the number of properties available for sale. CoreLogic revealed last week that the Melbourne housing market has been the strongest of any Australian capital city so far this year.
According to The Real Estate Institute of Victoria’s most recent quarterly results, the median price for an apartment or unit in Metropolitan Melbourne is now $583,000, with the median price in Inner Melbourne now $587,000. This variation in price can be partially attributed to the latest census figures highlighting that Melbourne’s city suburbs now have the fastest growing population in the state.
Three segments of the local apartment market have been performing exceptionally well. Well-positioned and higher quality $1M+ apartments continue to be highly sought after by the increasing number of downsizers and empty-nesters considering city living. Many strong results have been achieved in the $750,000-$950,000 price bracket, amidst a relative shortage of completed apartments on offer. Whilst investors and first-home buyers continue to drive the popularity of property priced from $400,000-$600,000, we are expecting heightened levels of activity with the changes to stamp duty for First Home Buyers as of July 1. We also expect that winter will see plenty of off-market activity, as a decrease in the number of properties for sale will encourage buyers to act to avoid missing out.
Demand for owner-occupied property will continue to increase, primarily due to the changing financial, superannuation and taxation landscape for investors. Although record low interest rates have again been kept on hold this week by the RBA, all of the major banks have announced mortgage rate increases over the past few months, particularly for investor and interest-only loans. Local buyers will be encouraged by NAB reports that foreign buying is at an almost 3-year low, as banks tighten lending restrictions to offshore buyers, including expatriate Australians.
The rental market is still performing very strongly, with no seasonal variation in demand and solid returns on offer. Strong demand has allowed record-low vacancy rates across all suburbs of Inner City Melbourne. The current median rental value for Docklands, Southbank and Melbourne CBD is between $500-$570 per week, with a rental yield of 5-5.5% on average. At present, the most popular property type for rent are one bedroom apartments, due to their broad demographic appeal.
To find out more about the current market, buying opportunities or for an up-to-date value of your home or investment property, click here or call 9091 1400.