Opinion on Melbourne Residential Market for 2014
– The year 2014 has been red hot in the residential sector of Melbourne.
– When comparing median house prices from those of 2013, the results are as expected, jumping a staggering $91,000 in the median housing price, with an annual growth of 16.34% for the year to date (REIV).
– When discussing the hot spots of Melbourne for the current year there is no doubt the inner east takes the cake.
– Using the prestigious suburb of Hawthorn East as an example, the median house price of the suburb is sitting at $1.49 million with only 49% of properties in the area being single residential dwellings (APM).
– The demand is just as high as the prices with 83.3% of properties being cleared at auction.
– Closely following this year was Balwyn North with a medium house price of $1.35 million, an annual increase of 27%, reflecting the competitiveness of the area.
– This area is very popular with the Chinese community with its emphasis on one of the top performing state high schools, Balwyn High.
– Although the inner east has been dominating the residential market this year, there has been major interest in the inner north attracting many developers and investors.
– With the infrastructure surrounding the universities, the area is becoming a hot spot for students and young renters.
– Northcote is the prime example of such a trend, with 38% of people living in the suburb aged between 20 and 39.
– High density areas do however have the potential for supply to be above demand, as seen in Melbourne’s CBD.
– In the outer suburbs such as the outer eastern suburb of Forest Hill, the price of housing is also increasing.
– Forest Hill has also had a phenomenal 87.6% auction clearing rate causing the area to be a hit for both young first home buyers and the older retirees.
– As the Melbourne population increases, so too does the rural urban fringe and such suburbs are becoming further developed and are changing rapidly into higher density areas, with a resulting greater need for infrastructure.
– In the north west of the city, developments are going up left right and centre.
– This area is a massive hot spot for developers as the land is still relatively cheap.
– In Greenvale, the Providence and Orchards and Gardens developments have set the trend.
– This has then spread further into Craigieburn which has seen vast developments by Aston and Stockland.
– Covering masses of land we are seeing a change in the area and the need for more infrastructure will continue.
– One of the major issues on the economic side of property is the inability of first home buyers to afford property or obtain loans.
– Due to Melbourne’s real estate becoming increasingly expensive and somewhat unaffordable, first and young home buyers are being forced to either rent or buy much further out than desired.
– This is an issue that has been highlighted this year with many of the inner city properties being competitively purchased by private investors or developers, causing more money to be brought to auction and thus very much pushing housing prices up.
If you don’t already, you can subscribe to receive this report directly each month for FREE from www.htw.com.au
Thanks to Therese from Alphabroker