Melbourne's down period looks to be very much behind it as buyers bid hard for quality stock, which has been limited in quantity.
“Auction clearance rates are now consistently hovering around the mid–high 70% range. Big crowds and multiple bidders are forming on a regular basis at auctions, and with depleted supply, bidding battles are erupting, pushing prices north,” says Antony Bucello, director of National Property Buyers Victoria.
“Even if vendors have realistic price expectations, strong competition is starting to take prices beyond what comparable sales evidence in the last six months is suggesting would be fair and reasonable.”
Even though property supply is set to increase, as is usual during springtime, this will be accompanied by rising demand and consumer confidence.
“Investor enquiries have increased considerably over the last four to six weeks to October 2019 – they are back in the market. Owner-occupiers, in particular first home buyers, are facing significantly increased competition, which will make it more difficult for them to break into the market,” Bucello says.
“There are some great suburbs out there that offer bang for your buck for the savvy investor; for example, Watsonia ticks a lot of boxes: proximity to amenities, public transport, the CBD, goods schools and parks.”
Melbourne’s recovery has also seen a comeback in the market for high-priced suburbs as buyers scramble to capitalise on low interest rates and the loosening of lending restrictions.
Premium suburbs, which were the hardest hit in the downturn, are likely to see strong gains over the next few months as the cut in interest rates and softer lending assessment results in much-improved borrowing capacity for high-income earners,” says OpenCorp director Matthew Lewison.
Melbourne’s ability to bounce back in short order can be traced to a strong, stable economy that ensures steady population growth and, in turn, consistent demand for housing.
“Population growth is higher, unemployment is lower, and jobs growth is stronger, providing a solid platform for housing demand,” says CoreLogic head of research Tim Lawless in the CoreLogic Home Value Index for September 2019.
With Melbourne reporting lower vacancy rates than Sydney, this suggests that rental properties in Melbourne are likely to be occupied more quickly than in Sydney. And with rental affordability down in Hobart, renters may find opportunities in Melbourne.
FAWKNER: Surfing paradise takes a tumble
The suburb of Fawkner is one example of the good-value areas north of Melbourne.
“The suburb offers one of the best opportunities within the middle ring out of the CBD, being only 12km from the city centre. Buyers are looking at the area as they fi nd better value than in neighbouring areas such as Coburg, Pascoe Vale and Reservoir, where median prices can range from the $700,000s up to the mid-$800,000s,” says National Property Buyers Victoria director Antony Bucello.
“Most of the stock available in the suburb is older housing on good-sized blocks, which is fi ne to live in as is, but offers excellent opportunities to add value later on.”
Development: Much of the housing stock available has strong renovation and development potential
Location: Just 12km north of the city centre, Fawkner offers good-value properties