Commentary On Melbourne Property Market Feb 2014
– Now that the federal election is behind us and mixed views loom on the up or down movement of current historically low interest rates, the expectation overall is that there will be moderate growth across the inner and outer suburbs of Melbourne.
– The later months of 2013 demonstrated market recovery and increase in buyer confidence with a median house price increase of 9% for the September quarter
– However the unemployment rate has not improved and with the high Australian dollar, buyer confidence is questionable as pressure is placed on the manufacturing industry within Victoria. Therefore we can expect growth to be moderate throughout this year.
– The prestige market within the inner city, inner east and bayside area over the years has been susceptible to volatile price movements. However as a result of continued economic growth, the median house price for 2013 increased 15%.
– While growth is expected in the suburban housing sector unfortunately the same cannot be said of the inner city apartments
– With numerous developments recently completed or due for completion this year, we will see an oversupply of apartments within the inner city with key areas being Docklands, Southbank and the CBD. The oversupply of apartments in these areas will see pressure being added to the rental market with the knock on effect of reduced prices.
– The same can be said for Melbourne’s developing outer urban fringe suburbs such as Truganina and Tarneit which could expect a decline in property prices as the newly developed areas face over supply of housing stock with developers offering incentives to purchasers
– Growth will remain steady as a result of continuing low interest rates contributing to the affordability for existing mortgage borrowers as well as private investors who benefit from the tax incentives
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Thanks to Alphabroker