Demand is high at all price points in and around a
10km radius of Melbourne. Inventory is low and we are seeing more bidding wars
and higher prices per square meter than ever before. Auction clearance rates
are over 90% in some inner Melbourne suburbs, that’s 9 out of 10 property’s
selling at auction.
Another reason why bidding wars are erupting is due to
the rising trend of Chinese investment. The
impact of Chinese investment in Australia residential property has become
increasingly recognised. You might be thinking why Victoria? Investors are
spotting value in Melbourne real estate in comparison to big brother city
Sydney. The median house price in Sydney tipped over $1M last year where
Melbourne is hovering around $750K.
Population growth is another
contributing factor of rising real estate investment. Over the past 12 months,
Melbourne has recorded the fastest rate of population growth at 2.1%.
Elsewhere, the annual rates of population growth have been recorded at 1.7% in
Sydney, 1.6% in Brisbane, 0.9% in Adelaide, 1.6% in Perth, 0.8% in Hobart, 1.9%
in Darwin and 1.4% in Canberra.
Mark Ribarsky is the Director of Wise Real EstateAdvice, a buyers agency that services inner Melbourne suggests ‘the real estate market is experiencing a
stage in an up and down cycle.’ Property cycles usually run in "seven year cycles" hence is often referred
to by property market commentators and refers to the swing in house prices
through the phases of boom, bust, bottoming and recovery. Overall, price gains are
likely to be constrained and over the long term, given that house
price-to-income ratios and debt levels are very high and given we have
just seen a period of very strong gains.
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