Australia’s second-largest city, Melbourne has most definitely experienced its highs and lows over the past 18 months. It has now entered its 6th statewide lockdown, however, it hasn't all been bad news, with the Victorian real estate market showing some very positive signs given the circumstances.
House prices across 92 of Melbourne’s 321 suburbs have soared by double digits in the space of just one year, new data shows, as home buyers turn their backs on inner-city favourites and relocate to leafy middle-ring and outer suburbs.
The National Bank of Australia is predicting Sydney and Melbourne property prices to rise more than 20 per cent by the end of next year (End of 2022) as the median house price in Melbourne rose to a record $1,022,927 over the June quarter, with prices up 10.4 per cent over the past year to July 2021, figures shown in the latest CoreLogic Report.
The research found that Melbourne's most desirable areas are shifting, with home values in suburbs further afield from the city rising by almost 25%.
Despite the fact that coronavirus outbreaks have put major cities back on lockdown, it is anticipated that property prices will continue to rise this year. In the case of Sydney, this could result in a 21.6 per cent increase in property prices in the build-up to the end of the year with a typical dwelling price anticipated to rise by more than $220,000.
In Melbourne, the forecast is for 17.6 per cent growth by the end of 2021, and it is anticipated that almost $150,000 to the median property value by the end of 2022.
According to experts, the rush to lifestyle suburbs has caused not just a rise in home prices, but also a rise in the number of people bidding on flats instead of houses — unit prices in certain suburbs closer to the city have risen by more than 20%.
Units have risen to a record median of $572,793, with suburbs geared towards owner-occupiers seeing the largest price rises.
Domain Chief of Research and Economics, Nicola Powell states Melbourne’s middle and outer suburbs had become hot property as people looking to upsize, improve their lifestyle, and being comfortable working from home, felt more confident buying further from the city.
With people saving more from staying at home during the pandemic and with government discounts on stamp duty and record low-interest rates these factors have clearly given Melburnians significantly more buying power.
Who could have predicted that over an 18 month period of a pandemic, that has affected the vast majority of people’s lives and working patterns, that this would result in Australia’s strongest performing property market since February 2004. With the likelihood of vaccinations increasing and the spread of COVID-19 reducing, the medium-term forecast must be for more of the same.