With booming house prices over 2016 – 2017, Melbourne is set to be the leader in the housing market over the next two years, however it is predicted that the unit market may not be as promising.
From the survey of 300 property experts, have found that the market was performing the strongest in Victoria, which bounced back from a sluggish performance in the June quarter. The survey suggested that suburbs like Toorak, Cheltenham, Werribee, Ballarat and the Melbourne CBD will perform above average growth over the next few years.
Will 2018 Be The Year Of Buyer or Seller ?
House prices in Melbourne haven risen by approximate 8.6 per cent over 2017, 5.5 per cent in 2018, and 3.4 per cent in 2019. Previous years has suggested that Melbourne’s property market is slowing down, with figures suggesting that in 2015 the housing prices increased by 15.8 per cent and in 2016 house prices increased by 9.5 per cent. Even though Melbourne house prices aren’t growing as rapidly, it is still expected to be the highest that Australia will experience.
Surprisingly, Hobart is predicted to have the greatest price growth for 2017 at 10 per cent, however, Melbourne is set to take over as the strongest property market in Australia in 2018 and 2019. Amazingly, the Victorian unit market is expected to increase by 6.4 per cent for 2017. However, in 2018 it is only set to increase by 1.2 per cent and in 2019 unit prices are expected to fall by 2.4 per cent.
Senior Buyers Agent, Mark Ribarsky said that “the underperforming apartment market is set to continue, with supply increasing and demanding stagnating.” He goes on to say that the nation’s diminishing property market revealed that a combination of factors such as; rising supply of apartments, declining affordability, tougher credit conditions and increasing interest rates was a cause of this. Reports have also suggested that the return landlords will receive from rentals is set to overtake capital growth in Victoria, with the yield on rentals set to increase, meaning that Victoria will experience the best rental income in Australia.
“It is difficult to predict when supply and demand will begin to rise together in terms of the apartment market, as potential buyers will decide to shift their preference to small dwellings, once external factors come into play, such as affordability, infrastructure, distance to city, and so on.”
With supply of properties increasing rapidly in some of Melbourne’s Western Suburbs, the participation of foreign buyers has fell in Victoria over the June and September quarter from 20.8 per cent to 14.4 per cent. Even though the participation rate has decreased by a substantial amount, Melbourne still has the largest proportion of foreign buyers. Reports have suggested that foreign buyers were less involved in established properties, but were more interested in purchasing a block of land and building a home. With, first-home buyers increasing demand for new and established properties.
By Mark Ribarsky, Senior Buyers Agent.