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VIC: Feb 2020 Melbourne market update

11D ago 0 Replies 18 Views
Despite the recent downturn, Melbourne continues to record a high rate of seller satisfaction, beating other major capital city markets across Australia. How will the Victoran capital fare for the rest of the new year?

RateMyAgent’s latest Price Expectation Report, which surveyed more than 40,000 Australians, showed a significant increase in overall national satisfaction, led by an explosive recovery in metropolitan Melbourne and Sydney, where satisfaction rates rose five to six times higher in just 12 months.
According to RateMyAgent’s CEO Mark Armstrong, the results show just how far the property market has recovered, with happiness doubling in the year nationally, strong gains in metro areas and a surging Victorian market leading the charge.
“As we look to the year ahead there are plenty of reasons for optimism,” Mr Armstrong highlighted.
The peak in happiness was seen most significantly across the Victorian market, with the state (55 per cent) overtaking Tasmania (51 per cent) this quarter as Australia’s happiest state.
Apart from leading in seller satisfaction, Victoria’s Melbourne also has the second-highest median price in Australia, giving buyers the confidence to venture to Melbourne’s fringes, which are expected to display accelerated growth moving forward.
In the top 20 happiest places nationally, Victoria has taken out the most regions (11), followed by NSW (seven) and Tasmania (two). Victoria holds six of the top 10 regions nationally.

Property values
CoreLogic’s February 2020 Home Value Index has found a rebound in the pace of capital gains across the Australian housing market throughout the month, seeing the national index rise by 1.1 per cent.
The strongest capital gains were recorded in Sydney, at 1.7 per cent to $872,934, and Melbourne, at 1.2 per cent to a median house value of $689,088.
On an annual basis, both cities have returned to double-digit annual growth rates, with values up by 10.9 per cent and 10.7 per cent, respectively.
According to CoreLogic, the latest results “continue the recovery trend that has been running since June last year”.
Melbourne was highlighted as being the “most recent city to stage a nominal recovery, with housing values surpassing the September 2017 peak last month”.
The Victorian capital joins Brisbane ($503,265), Canberra ($631,862), Hobart ($488,968) and Adelaide ($439,453) in reporting housing values at record highs.
For investors who are looking for more affordable entry points to the capital city markets, CoreLogic’s head of research Tim Lawless said that they find it more practical to narrow down their property search by examining lower quartile values.
The lower quartile – or the most affordable 25 per cent of properties in a region – would provide a better view of the market entry point, according to him.

Supply and demand
According to the latest days on market data from the Real Estate Institute of Victoria (REIV), the average Melbourne house takes 34 days to be sold – down from 42 days from the corresponding period in 2019.
Outer Melbourne is the fastest selling area in Metro Melbourne, with suburbs in the outer ring taking just 33 days to sell on average, followed by Middle Melbourne with 34 days and Inner Melbourne with 41 days on market.
Outside the city, regional Victoria homes are seeing 55 days on average. This is down from the 57 recorded in November 2019.
Warranwood and Montrose in Melbourne’s east have the shortest waiting periods across the state, with the average property taking just 15 and 16 days to sell, just over two weeks.

Rental market
Low vacancy rates continue to put pressure on leaseholders, ultimately affecting renters across Victoria, according to data collated by the Real Estate Institute of Victoria (REIV).
Median rent for houses in Melbourne remained at $480 per week, but median rent for apartments saw an increase, with the average price now sitting at $445 a week.
Still, Victoria’s rental market remains tough after another month of low vacancy rates, with the metro remaining at 2.2 per cent and regional vacancy rates for January being 1.7 per cent.
“There is a strong demand for more rental properties, and sadly many families are still struggling to get a rental home,” Ms Calnan said.
With new rental laws being introduced by the Victorian government, landlords are apprehensive about how the regulations will affect them, adding to the rental shortage in Victoria.

Despite affordability issues, early interest and activity from investors seeking “premium” investment opportunities in 2020 have been recorded in Melbourne – a sign that such assets will only increase in popularity in the months to come, according to Colliers International Melbourne.
The company’s metro sales director Ted Dwyer and associate director Ben Baines have indicated that despite a marked decrease in activity around “trophy” assets in 2019, premium investments were still considered a lucrative investment.
In fact, appetite for these assets saw Victoria receive a 70 per cent clearance rate. This result is only expected to go higher through 2020.
The Colliers International metro sales team reported 119 premium investment transactions in Victoria for 2019 – a total of almost $365 million worth of sales. Activity was most prominent in the metro region, where investors competed for service stations, banks and fast-food assets.
The average yield for premium metro assets last year was 5.27 per cent, while regional assets achieved an average yield of 6.4 per cent.

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