According to Herron Todd White’s Report just released, the Melbourne residential market continues to experience a slowing in activity which is helping to stabilise median house prices.
Lower auction numbers and clearance rates indicate than an upward trend is unlikely in the short term given the current state of the market.
With a possible increase in the number of properties put to market as nervous investors seek to avoid dramatic price falls, Buyers might just find a market more to their liking.
Melbourne CBD and Inner Suburbs
- The recent crackdown on lending to property investors has reduced demand but has not yet translated to significant falls in value, although some investors who bought in the peak of the market are being forced to consider selling at a loss.
First home buyers are filling the hole in the market, especially in the inner-city and in the outer suburbs where the price point is $650,000 or less.
- Savvy Buyers who do their homework will be well positioned to buy at a fair value or at a cheaper price point.
- As housing affordability has declined, property developers have led the charge to find cheaper and larger parcels of land and more profitable returns, gradually moving outwards from Ringwood to Croydon and Lilydale whose median sales price has averaged 10.5% for the past 5 years.
- With the property market entering a new cycle, developers may have to adjust their profit margins.
- Melbourne’s outer suburbs are more likely to see values fall, however this will be tempered by population growth, low interest rates and growing employment numbers.