Melbourne Property Prices have defied doom and gloom forecasts
Published on 20/10/2020
The September Quarter has been released by the REIV and I am pleased to say that Melbourne property prices have defied doom and gloom forecasts to remain resilient throughout the coronavirus restrictions. The figures show that median house prices in metro Melbourne only fell 1.7 per cent with the median price of $846,000 while still recording 7.4 per cent annual growth. Units in Melbourne have achieved a median price of $622,500, which is 0.2 per cent higher than the June Quarter and an annual increase of 5.4 per cent.
The following factors have contributed to the market’s strength:
Low interest rate
Record-low interest rates- with the cash rate at the historic low of 0.25% where it has been since late March and the Reserve Bank of Australia keeping the official interest rates on hold at its last meeting as well as talk of a further cut to come this side of Christmas.
Decline in stock level
Due to the restrictions, fewer properties were listed for sale which kept prices relatively stable over the quarter. There was however an increase in off market transactions because during the restrictions vendors did not want to invest in advertising campaigns or have a bunch of strangers or unqualified buyers traipsing through their home at an inspection. When inspections were not allowed, vendors did not want to try and sell their properties the traditional way when a potential buyer could not inspect.
Open, closed, open again
The varying levels of restrictions placed on Melbourne Metro and Regional Victoria over the last couple of months impacted transaction volumes as expected. While transaction numbers in Melbourne plummeted by 31 per cent compared to the June Quarter, transactions in Regional Victoria soared by 15 per cent. Low advertised stock levels are a key factor supporting housing values.
Government support packages
The federal government announced an extension of the Jobkeeper and Jobseeker packages to the end of March 2021. This provided some confidence to both businesses and employees.
Since Covid-19 which has led to most of us working from home, and restrictions on many of the activities that favour city living not permitted there has been an increase peoples’ desire to move coastal and regional. In the September quarter, regional houses set a new quarterly record at $442,500 recording strong growth at 5.1 per cent for the quarter and 4.9 per cent over the last 12 months.
We have seen an increase in the volume of stock hitting the market which means we will be busy right up until Christmas. It’s a great time to buy but do not expect a bargain as there remains strong competition for quality properties due to supply and demand.
If you are considering buying, selling or renting a property please feel free to reach out as I would be happy to have a no obligation chat.
Until next time, stay safe and stay well.