First home buyers are looking to take advantage of Melbourne’s recovering market as prices start soaring again
Over the past year, Melbourne has led the national downturn in the property market alongside Sydney – a decline fuelled by tight credit restrictions and an impending election.
“In general, investors were caught up in a perfect storm of ‘fear of the unknown’, with the federal election in the balance, the ongoing tightening of lending policies, and low interest rates,” explains Income2Wealth director Paul Wilson.
“Starting with Sydney and Melbourne, the ripple effect of these two factors saw a decline in buyers and the wind blown out of the sails of sellers as fewer properties were listed and the commentary from all the doom and gloom ahead became a self-fulfilling prophecy.”
However, things are now looking good across the board for Melbourne as the market stabilises and comes out from under the cloud of uncertainty. The conditions are perfect for first home buyers in particular, who have the opportunity to grab a slice of the market before property values rise again.
“First home buyers are already emerging, hoping to find a bargain before prices take off again. If interest rates stay low, which by all indications they need to, and the lending policies become more flexible, then there is the desire and the confidence for investors to continue to grow their portfolios,” Wilson adds.
Short supply is contributing to the increased demand, as it is fostering renewed competition among buyers.
“The current environment is being fuelled by the shortage of properties on the market, and we expect this trend to continue while demand is at these current high levels and vendors sit on their hands,” says Antony Bucello, general manager of National Property Buyers Victoria.
Outside of Melbourne, Geelong and Ballarat continue to stand out as strong alternatives to the capital, as the inner suburbs of Melbourne are not expected to get that much cheaper despite some price falls in the last year or so, says Multifocus Properties & Finance CEO Philippe Brach.
“There is substantial housing and price growth in Geelong and Ballarat, which is also supported by state government initiatives to move government jobs to these locations and give incentives for companies to move there, like payroll tax breaks.”
SUBURB TO WATCH
LORNE:Surfing paradise takes a tumble
One of the destinations along the Great Ocean Road, the suburb of Lorne is a big hit with holidaymakers looking to relax by the shore and surfers in search of excellent waves. The suburb has a vibe that is reminiscent of the Mediterranean, with many natural attractions like the rock pools along Shelley Beach and the Great Otway National Park.
Over the three years to August 2019, property prices were on a positive streak. However, the previous year saw values of houses and units fall by 7.9% and 9.9%, respectively. In the process, the median house price dropped below the $1m mark, while units came in at $661,121.
Tourism: Tourists are attracted to Lorne’s famous surf beach and the nearby national park
Location: A stop along the Great Ocean Road, Lorne is in a prime location