Will Melbourne Property Prices Continue To Rise?

Melbourne Market Wrap February 6th, 2017

It has never been more exciting to be in real estate and more importantly, in advocacy right now.

Over the weekend it was my in-laws’ 50^th wedding anniversary, quite a feat! Getting to the point just about every middle aged person asked me how the property market is going. This means there are a number of people who still have a great interest in property, now more so than ever.

What I realised is that those who own property are either looking to downsize or upgrade depending on age. I also noticed many mature aged couples are concerned about the debt levels their children were taking on to buy their dream home in their dream location.

Add to this, the frenzy we saw 6 weeks out from Christmas week last year in both buying and selling and you have some very interesting times ahead.

Media headlines highlighting the lack of buyer affordability just seems to be fueling what’s already a very hot property market.

February this year has started with a bang, with demand outstripping supply. Rather than would-be property buyers sitting back, Melbourne’s property market is going from strength to strength for now at least.

Core Logic reported a year on year growth (to Jan 31^st) of 15.2% for Melbourne and 19.7% for Sydney, these are big numbers especially when you consider the double digit growth property prices have already experienced the past three years. And even more staggering when you take into account that many “experts” predicted negative or sub 5% growth last year.

Source: PIXABAY

Will property prices continue to rise?

A big driver of Melbourne property prices has been its population growth. Respected economist Saul Eslake points out that in contrast to other states, population growth in Victoria is accelerating (reaching a seven-year high in mid-2016). Eslake says “even though there is a lot of new supply coming on-stream in Melbourne, prices could still keep rising during 2017, albeit at more moderate rates.”

A number of inner city agents are already reporting a huge lack of supply for this year. Those who managed to list properties last December for a February auction are reporting big buyer numbers through their open homes, 25 plus groups. One agent going as far to say “even our main road properties are being heavily attended which is unusual. Buyer advocates who previously were not interested in these properties are now inspecting these homes.”

The world according to Trump

It’s already been a very interesting ride since Trump assumed power in January this year. What’s most interesting for me though has been his initial bravado then back down or compromise on each of his election policies so far. Perhaps it is very early days  but I am yet to be convinced whether he will be able to see many of his election policies through.

The US Federal Reserve left rates on hold last week which will mean the same for us when our Reserve Bank Board meet for the first time this Tuesday afternoon. The problem Australia is facing is a rising unemployment rate and the Aussie dollar heading to 80 US cents.

What our economy needs is the three promised rate hikes to be carried through by the US in 2017 and for Trump to start loosening the Frank Dodd restrictions (banking regulations). Both these measures will have a huge positive effect for the US and the global economy.

That’s a wrap for this week!

Whether buying or selling call us for independent, qualified and informed advice. We charge a flat fee for our buyer purchase service and no fee for the sale of a property.

You can call me direct on the mobile 0418 740 606 or the office 9863 7514.

Street Advocate Client Reviews

Peter,

Just a short note to thank you once again for your help in selling the property.

Dealing with you Peter was a pleasant experience, you were very professional with all aspects of the sale including:

·         Your knowledge of the real estate industry

·         Negotiating down the agents fee.

·         You understanding what marketing campaign was needed and directed the agent accordingly

·         Keeping me up to date by communicating via phone, text , email and weekly meetings

Not only will I use you in the future but I would have no problem recommending other vendors to you.

Thanks once again, Arnie Nuzzo

6 Highett Rd, Hampton

Thinking of buying or selling a home?

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Peter Sarmas on 0418 740 606.