Melbourne property values are falling!
But maybe the Melbourne real estate market is not as bad as some parts of the media make out.
According to data released last week Melbourne’s median house price increases 1.4 per cent in 2018
Now before you say the REIV represents real estate agents and is biased, here’s what they say…
REIV property data is the most accurate and up-to-date in Victoria, collated and submitted directly by those working at the coalface…. the REIV is uniquely placed to access this raw data which is not subject to interpretation, speculation, assumptions or third-party sources.
Here’s the offical figures:-
The Real Estate Institute of Victoria’s latest data reveals that Melbourne’s median house price increased 1.4 per cent to $826,500 (from $815,000) and the unit price increased 1.8 per cent to $597,000 (from $586,500) in the 2018 calendar year.
REIV President Robyn Waters said that despite low confidence, sluggish auction clearance rates and a 20 per cent reduction in residential property sales in the past 12 months, vendors are still getting good prices for their homes when they do sell.
“It might take you a bit longer to sell and you might have to put in a bit more effort, but the big picture is showing that house prices have increased slightly in Melbourne over the past 12 months,” Ms Waters said.
“Confidence is a major factor in the property market and this latest REIV data is showing that the market overall is steady, coming off an increase in the median house price of 13.2 per cent in 2017 which could not be sustained.
“The top 20 star suburbs of 2018 were all in the outer ring with most located in the expanding south east and Mornington Peninsula/Bayside areas; new transport infrastructure including Skyrail and the Monash Freeway widening are likely to have been a factor in this growth.”
The December quarter saw a drop in Metropolitan Melbourne’s median house price of 3.7 per cent to $796,500 while Regional Victoria’s went up by 2.5 per cent.
The market is fragmented
There’s no doubt property values have fallen in some parts of Melbourne and property prices are likely to fall by a little further this year, there is no crash in sight.
Trent Wiltshire – economist at Domain and author of their Property Price Forecast report suggests that 2019 looks likely to be a year of greater stability.
Just to be clear the report suggests that prices will fall further in the first half of 2019, but at a slower pace before the Australian property markets move into a phase of moderate growth
Similarly the REIV expects Victoria’s property market to remain steady in the first half of 2019 as we await the outcome of the banking Royal Commission and Federal Election but things should begin to look up again in the second half of the year.
Our research at Metropole suggests that it is likely that property values will be underpinned by a robust economy, jobs growth Australia’s strongest population growth and the influx of 35% of all overseas migrants.
Melbourne remains the nation’s population growth powerhouse and the rate of growth is likely to slow a little Melbourne still rates as one of the 10 fastest growing large cities in the developed world, with its population likely to increase by around 10% in the next 4 years.
As dwelling values trend lower, rental rates in Melbourne are recording a moderate rise.
Vendors are waiting it out
Ms Waters said properties are being tightly held in Inner Melbourne as vendors wait out this period while the markets in Outer Melbourne and Regional Victoria are stronger as buyers are inclined to snap up more affordable options.
“There is no doubt that the banks’ tighter lending conditions are contributing to this trend as are incentives for first homebuyers which encourage the purchase of affordable properties, more likely to be found in Outer Melbourne or Regional Victoria,” Ms Waters said.
“That said, there were a few inner suburbs – Malvern East, Thornbury and Hawthorn – that fared well in the last quarter of 2018 thanks to an increase in the number and value of sales from the September quarter.
This is a good indication that confidence is starting to pick up in the prestige areas.
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