With the help of 3 interest rate reductions, some tax relief and the banks loosening their shackles on lending, the end of 2019 brought some positive growth. Melbourne prices rose 2.2% in November 2019, making the Melbourne property market 3.7% below the peak in October 2017.
However, there are markets within the different markets, so higher end properties rose by 11% (because they decreased more after October 2017), and lower priced properties rose by 5.7%, but all in all, most properties improved over the year.
The great news is, that properties took less time to sell, being on the market for only 30 days, instead of the 34 days, the time it took 12 months ago.
While there were less properties on the market for the first half of 2019, the momentum came back with significantly more properties towards the end of the year, and the auction clearance rate remained steady in the low-to-mid 70% range.
2020 looks like it will bring us back and beyond the peak of October 2017. The volume of properties on the market will increase, therefore we will see smaller rises in property prices, but at least they are rises.
As we are expected to see a 10% population growth over the next 4 years, more building approvals are coming to fruition, helping the construction industry get out of its rut of 2019. First home buyers will again struggle to enter the market as investors seek properties with positive cash flow, bumping the first home buyers from the opportunities they saw in 2019.
Propertyology’s head of research, Simon Pressley, believes that the next 5 years growth of median house values will exceed the last 5 years growth, and that the growth will be more wide-spread. Mr Pressley advises investors to look at suburbs where there are strengths in new building approvals, jobs creation and economic/population growth.
ANZ’s latest Housing Update report forecasts Melbourne’s annual price growth to reach low double digits peaking in mid-2020. All in all, it looks like a positive 2020 for Melbourne property