After a ‘quieter year’ in 2014, Domain Group’s senior economist Andrew Wilson believes the Melbourne market is off to a strong start in 2015.
“The Melbourne market has stepped up a gear,” Wilson said. “It’s a market that’s certainly on the move…aspirational buyers, particularly in the eastern suburbs, continue to drive the market."
Last year, Wilson identified issues emerging including Melbourne's underperforming economy and high unemployment rate.
However, the city is now turning itself around, said Wilson. For example, it broke the record for an Autumn auction day last weekend with over 1400 properties auctioned, making it the third highest weekend ever for auctions in Melbourne.
He is expecting the market to ease over the Easter and ANZAC holiday periods.
“We’re in for a pause now until May and it’s a question of whether the market momentum can be maintained through the rest of the year.”
He said a mid-range forecast was around the 5% mark this year, similar to predictions for 2013.
“But if these activity levels continue we should see it move above 5%, around 7% mid-range, given we have the same sort of scenarios going forward.”
Wilson said falling rents in units are no surprise given higher levels of development in the inner CBD.
“It doesn’t have the same shortage of properties that other capitals have and therefore not the same prices growth in rentals,” he said.
“In Melbourne they are well below those in Sydney and expected to grow moderately at best this year.”
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