Herron Todd White Opinion’s On The Melbourne Residential Market
Property prices in Melbourne have generally shown steadying signs over the past few months after experiencing a decline early in the year.
The general consensus from property professionals and research data is that REIV data indicates median house prices have remained steady at $535,000 in the past quarter, which is 5% down on the year.
Consumer confidence within the market is still low due to local and global economic uncertainty, but signs are evident that consumer confidence is slowly improving.
With another rate cut not on the agenda, property professionals advise the market should continue to steady and possibly show slight signs of growth in the near future.
Supply and demand for Melbourne’s residential property market indicate it is predominantly a buyer’s market as consumers have the opportunity to ‘shop’ around for longer for a better product at a better price.
Houses sold through private sale have recorded an increased median price of 2.1%, while those sold at auction have seen a 2% drop. This reflects buyers willingness to be conservative and adopt a wait and see approach when it comes to auctions, resulting in a low clearance rate of 60% for the June quarter.
Agents are indicating many vendors are still dreaming of post GFC property prices and are unwilling to settle for much less, even though market conditions have softened considerably since then. This is leading to extended marketing times as properties are sitting on the market for much longer than usual as buyers are being smart, knowing very well the majority of properties aren’t worth what they were 12 months ago.
Residential rental vacancy rates have slightly dropped down from 2.2% to 2%, this will create more competition in the rental market.
Property professionals working the outer suburbs indicate there is an oversupply of new homes in the area which is driving prices down.
Highlights Summary courtesy Therese O’neill from Alphabroker Mentoring