The annual decline in Melbourne’s prices has hit the double digits, while the regional markets revel in the ripple effect
Rates of decline may be going down across the national market, but Melbourne is not yet done falling. According to CoreLogic’s Home Value Index report for April 2019, the capital recorded an annual decline rate of 10%. This drop is particularly evident in the priciest parts of the city, which have seen the greatest annual rate of decline, at 13.7%, of all the capital cities.
Nonetheless, it is not all bad news for Melbourne. While high prices have crippled parts of the market, affordability has given other pockets much more visibility than before.
CoreLogic’s report noted that Melbourne’s lower quartile performed better, with the boost coming at least in part from the first home buyers who are starting to carve out a bigger slice of the market. Going after lowerpriced properties has enabled these buyers to negotiate more successfully for loans.
The regional markets continue to be the biggest winners in this season of negativity, with parts of regional Victoria able to buck the downward trend across the country in April 2019.
“Regional areas such as Ballarat, Greater Bendigo and Greater Geelong have been experiencing growth following Melbourne’s surge, with demand in these areas still high, which shows through with the vacancy rates of 1.13%, 0.93% and 0.84% respectively,” says Clint Greaves, director of Real Estate Investar.
“We recorded vacancy rates across Victoria of 1.09%, with Melbourne at 2.52%.”
Struggle not expected to last
The regional markets are getting their chance to bloom, but Melbourne remains on track to recover its former glory quickly, with infrastructure projects in the pipeline and a growing population.
“New South Wales and Victoria have both experienced extended periods of undersupply and, despite record dwelling commencements over the past few years, we are forecasting that these markets will both remain in a situation of undersupply over the coming four years,” predicts Geof Snell, principal property economist at BIS Oxford Economics.
“Victoria, in particular, where there has been very strong population growth, will require the continuation of significant additional dwellings over the coming five years to avoid the re-emergence of a rapidly rising undersupply after the downturn works its way through.”
Road and rail upgrades are set to happen in the metro, which should create employment opportunities.
SUBURB TO WATCH
NIDDRIE:
A 15.7% stumble over the 12 months to April 2019 has seen Niddrie edged out of the million-dollar club of house markets.
The suburb once sustained steady growth, but it seems that Melbourne’s slump is catching up with it. Values fell in the unit market as well, but at a gentler rate of 0.3%. The median values of houses and units came in at $973,531 and $639,394, respectively.
The rental market is holding up well – after rent increases of 2.9% for houses and 2.3% for units, both property types have the same average rental rate of $450.
Niddrie is bounded by the Calder Freeway to the north. The local shopping centre can be found on Keilor Road.
Decline: The median house price in Niddrie fell below $1m in the year to April 2019
Convenience: Niddrie has its own shopping centre and is bordered by the Calder Freeway
