Melbourne has been lagging behind other capital cities in terms of annual price growth, but it appears it is ready to play catch up this year, an expert predicts.
Michael Yardney, director of Metropole Property Strategists, said it is likely for the city to realise a double-digit gain this year.
"While Melbourne housing values suffered because of its extended lockdown, which severely impacted market activity in 2020, since late October the Melbourne property market has rebounded strongly," he said.
Figures from CoreLogic show that the annual median dwelling price in Melbourne grew by 0.7% to $736,620. This annual gain is substantially lower than Sydney's 5.4%.
"There is still plenty of growth left, as Melbourne property values have only just reached their pre-pandemic levels and are about to create new peaks, meaning they will only now reach the previous 2017 peak levels," Yardney said.
A recent report by ANZ Bank projected a 16% gain in Melbourne house prices this year. A further growth of 6% is expected by 2022.
However, some segments in Melbourne might not perform as well as the others. Yardney said the inner-city and high-rise apartment markets are likely to underperform.
"Currently, I'm worried by a large number of poorly built inner-city apartments on the market or planned for completion. Many, in fact, most of these are being bought by overseas investors and as these are likely to become the slums of the future," he said. "Just to make things clear: I would avoid this segment of the Melbourne property market."
