Property investors have been warned that Melbourne is likely to be Australia’s worst performing capital city for capital growth over the next few years.
Residex CEO John Edwards has said that, while the Melbourne market looks to be improving, he suspects that more corrections are on the way.
“We are expecting, over the medium term, for Melbourne to be the worst performing capital city in Australia,” he revealed in his market commentary for March.
This will particularly be the case in Melbourne’s unit market, he believes, due to the significant supply of new stock that is set to come to the market this year.
It’s not all bad news, however, as Edwards believes that the RBA’s 0.5% interest rate cut will prevent what would otherwise have been heavy losses.
“Today’s RBA decision should stop the heavy adjustment process which would have otherwise been inevitable in the Melbourne market, and it will help push all markets which were passed the bottom of the correction phase,” he said on Tuesday.
“The interest rate reduction is going to provide the much needed consumer confidence boost. Without some form of stimulus, we would have been likely to continue seeing housing values decrease across much of Australia.”
Where do you think the Melbourne market is heading? Have your say on our property investment forum.
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