After last year’s Liberal Party win in the Federation election, that was more ‘investor friendly’ than the policies of the Labor party, investors can now breathe easy with interest rate and tax cuts helping investors to find properties they can positively-gear.
Throughout 2019, rental vacancies remained steady at 2.2%.
According to CoreLogic, the inner east of Melbourne was the highest returning sub-region with 12.1% growth in 2019. The weakening in the housing construction sector over the last 12 months will lead to a higher demand for rental properties, therefore the current median weekly rental for properties in Melbourne of $480 per week, will naturally increase throughout 2020 as demand increases.
The four key points that will sustain the investment market are:
- 1500 new households are being formed in Melbourne every week, mostly due to record immigration.
- There is continuing foreign interest in Melbourne from tourists, migrants, investors and developers.
- The Victorian economy is the strongest of all the states and continues to grow with strong job growth and higher wages.
- The rental market remains tight at 2.2% vacancy rate and growth in rental returns.
In saying that, investors should be looking at outer areas to maximise their returns, with the best suburbs in 2020 offering strong growth potential and returns of between 3.4% and 4.8%, to be Croydon North, Melton, Dallas, Thomastown and Officer.
2020 will remain positive for investors who look to diversify their portfolio with a variety of inner city, growth corridor suburbs and regional property.