With the official cash interest rate reducing to a new record low of 2% in May 2015, the property market is starting to see a surge of new and existing investors. Combined with the long-term potential for strong yields and capital gains, many property investors feel this is an ideal opportunity to get into the market.

Here are some highlights from the Review for Victoria

– The Melbourne residential property market is performing well across the board and is described by many property analysts as hot. Units do not seem to be reaching the same levels of growth in some areas, however this can be explained by an oversupply in the market.

– The overall positivity within the residential market in Melbourne can be attributed to many macroeconomic drivers including the low interest rates, increased foreign investment, population growth and job security.

– Foreign investment is one of the drivers in the current Melbourne market. Chinese buyers are especially active and heavily involved in the eastern suburban, prestige and off the plan property markets.

– The suburbs being impacted heavily are Doncaster, Balwyn and Templestowe. It is the financial backing of some of these foreign investors that is keeping local buyers out of the market.

– Consider the suburbs of Northcote, Essendon and Carnegie as examples to gauge current market performance. The price point for all three suburbs is medium to high. – The main demographic is quite similar, the majority being professional couples, some with children and generally in the medium to high income earnings bracket.

– Housing in Northcote is excelling. Median house prices rose 4.2% for the quarter to reflect a median sale price of $943,000. Units are remaining flat or even declining slightly. The median sale price declined 1.81% for the quarter to $487,500.

– Northcote’s popularity can be attributed to many factors such as being seven kilometres from the CBD and access to extensive public transport, Northcote Shopping Plaza and High Street retail strip.

– The high demand for housing in this area has forced entry level prices to rise. Last year entry level buyers could afford partially updated properties in Northcote. The increase in value has forced them into buying houses in original condition.

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Thanks to Alphabroker for this summary