How the Melbourne Property Market is Holding Up in the Face of a Changing Landscape
At the beginning of 2018, leading Australian economists predicted that property prices across the country were about to come crashing down – but despite such widespread speculation, the Melbourne property market has held up remarkably well.
As we head into the second half of the year, now is a great time to look at how the market has managed to stay so strong and consider why Melbourne remains such a great place to invest despite any perceived uncertainty.
It’s home to a growing population
One of the key reasons why the Melbourne market has continued to experience such impressive numbers is due to the sustained growth in population. In turn, this has supported the underlying demand for residential properties and is unlikely to slow anytime soon.
There is plenty of employment opportunity
Part of the reason why the Melbourne population continues to experience such growth is because of the strong employment opportunity available. Despite a steady influx of new arrivals from interstate and overseas, Victoria’s unemployment rate remains relatively unchanged – and the state continues to lead the way in terms of economic growth.
Owner-occupiers are starting to outrank investors
While the tighter restrictions on overseas investors were sighted as one of the reasons why the Melbourne property market was expected to experience a downturn, the changes have been strongly in favour of first home buyers. With less investor competition, more and more Melbournians have been able to purchase their first homes and owner-occupiers are now starting to outrank investors.
Buyers are beginning to look in more regional areas
Although many buyers have been priced out of the inner city, there remains to be plenty of opportunity in Melbourne’s rapidly growing outer-suburbs. Reports show that in 12 months leading up to March 2018, 69,708 new dwellings were approved across Greater Melbourne in suburbs such as Truganina, Tarneit, Cranbourne East, Beaconsfield and Mickleham.
Interest rates are expected to stay put
With interest rates at a historic all-time low of 1.50%, many expected that rates would rise back up in 2018. However, this prediction was proven false and the interest rates are now expected to remain steady for some time. While banks are beginning to tighten their lending policies in response to the royal banking commission, this hasn’t deterred homebuyers – and the low interest rates remain a key factor for many Melbourne buyers.
Please be aware that this is general advice only. For more information specific to your individual financial circumstances, speak to a trusted financial professional and make sure to consider all of your options before making any final decisions.