Where’s The Melbourne Property Market Heading?
By Peter Sarmas on 29 Jul 2013
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Recent data from a number of providers shows that there has been a rise in property prices across the country – and the Melbourne property market is leading the way.
Melbourne Property Market Leading the Way
According to Fairfax-owned APM, the figures demonstrate that Melbourne has experienced its fastest property price growth since the government stimulated boom of 2009-2010.
The Australian Property Monitors (APM) released data last Friday indicating that Melbourne earned the strongest sales results over the June quarter. Figures show that Melbourne house prices are up 5 per cent, while unit prices are up 3.7 per cent.
These results are in line with findings released by the Real Estate Institute of Victoria (REIV) early last week, which suggest that the Melbourne median house price has risen by a moderate 2.4 per cent, but to a new high of $562,000.
RP Data also concur with these figures. Their data shows that Melbourne recorded the highest price growth figures of all states this month at 2.2 per cent, outstripping even Sydney’s price growth.
“Melbourne recorded the highest price growth figures of all states this month at 2.2 per cent.”
APM senior economist Dr Andrew Wilson suggested that this three year high in sales figures marked by the third consecutive quarterly rise is the result of a strong run of low interest rates, which has led to a newfound degree of confidence among potential buyers looking to get into the market.
On the Ground
On the ground, Melbourne real estate agents are reporting tight stock levels and strong buyer demand. A number of auctions have welcomed multiple bidders and prices beyond reserves. This stock shortage is certainly evident in the latest RP Data figures, where the total number of listings for sale in the Melbourne property market is down a substantial 13.2% to 32,078 from the same time last year.
When asked about the current Melbourne market, buyer advocate Catherine Cashmore said “For current property purchasers pitting their budgets against competing bidders who are also shopping for a reducing pool of existing inner and middle ring quality stock, the atmosphere feels anything but subdued.”
Although the figures present an overall rise, there are many areas which have yet to recover their 2009 values. According to Dr Wilson, much of this rise has been attributed to the middle market in the price range between $500,000 and $1 million.
Melbourne is a More “Steady as she Goes” Property Market
Although we see the Sydney property market performing strongly with auction clearance rates at 82%, Melbourne’s is more a “steady as she goes” market, which is not a bad thing and will help keep things stable and limit the chance of property price bubbles and crashes.
Inner city real estate agents are already booking auctions for August. Usually this is the last month for savvy vendors to lock in a sale before the September AFL finals commence in Melbourne.
They can be sure they won’t have to compete with the federal election now that August has been given the all clear by Prime Minister Rudd.
