The Victorian housing market is projected to realise substantial growth over the next 12 months, according to the latest prediction by Riskwise Property Research.
Houses in Greater Melbourne and the regional areas with access to the capital city continue to register robust demand, which is supported by ultra-low interest rates and strong buyer sentiment. These factors could potentially result in an 8% to 12% capital gain over the next year.
"We’re seeing plenty of buyers who put their searches on hold in 2020 suddenly rushing back to buy. Stock levels are very low and auction markets in particularly are very competitive," said Peter Wargent, co-founder of BuyersBuyers.com.
However, Wargent said buyers have to be well-organised and well-researched, especially due to uncertainties in the market.
"Melbourne has had its issues with lockdowns and snap lockdowns, so the market has been somewhat disrupted, and some auctions have had to be held on Zoom or online,” he said.
According to the report, a double-digit growth is likely for houses in Melbourne given the low availability of stock.
“But while there’s ostensibly a reasonable number of listings in Melbourne, competition for family-suitable homes in desirable areas is still running at a high level, and price growth is very likely," Wargent said.
However, the report noted that due to the lower-than-expected population growth, some greenfield areas carry a higher level of risk in the short term due to high supply.
While the short-term risk is elevated, over the medium to long term, no dramatic price reductions are expected. This means that houses still present a lower level of risk than that associated with high-rise units.