The days of downturn seem far removed from Melbourne as it now records growth across the board.
In an analysis of the recently concluded Property Investor Sentiment Survey – Australia’s largest survey of property investors run annually by Your Investment Property, Property Update and Onthehouse – Metropole Property Strategists CEO Michael Yardney points out that it is a good time to look into the Melbourne market.
“This is the best countercyclical opportunity in Melbourne and Sydney for a long time, and around 39% of respondents think Melbourne is going to have the best long-term capital growth in the next five years.”
The results of the ANZ/Property Council Survey for March 2020, which measures consumer confidence and expectations for the property market, certainly indicate that buyers have high hopes for Melbourne. House price expectations are close to the levels last observed in 2014, with expectations for Victoria being among the highest.
“Signs of recovery in the residential property market have been emerging for some time, with sentiment turning around convincingly in May. Since then, auction clearance rates have picked up sharply, prices have been rising strongly in Sydney and Melbourne, and housing finance is starting to pick up,” says ANZ senior economist Felicity Emmett.
CoreLogic’s Home Value Index for December 2019 also shows that Melbourne equalled Sydney in recording the highest annual capital gain as the year closed, with an increase of 5.3%.
In particular, the premium sector of the market experienced spectacular growth as the top quartile recorded a 7.6% increase in prices across 2019. Meanwhile, values in the lower quartile of the market rose by 3.7%.
The Inner East pocket of Melbourne was the leader when it came to capital city subregions, with property prices up by 12.1% in the same period; housing values are expected to reach a record high in 2020.
Outside the metro, the Warrnambool and South West regions of the state were the top growers among non-capital city subregions.
However, the ANZ/Property Council Survey revealed that consumer confidence in Victoria’s commercial property market is low, given the sluggishness of the office, tourism and retail sectors.
“Only time will tell whether sales will be able to keep pace when listing volumes pick up,” says Propertyology managing director Simon Pressley.
SUBURB TO WATCH
LEOPOLD:
A good-sized suburb with a reasonably priced property market, Leopold has excellent long-term growth potential given its consistent upswing over the five years to December 2019.
The suburb is mainly populated by families who own their properties, with barely 20% of the population being tenants. Leopold Primary School is situated in the suburb, for families with kids. The suburb also serves as a gateway to the Bellarine Peninsula and has a few heritage sites.
House prices are at a median of $539,152, while the median unit value is $377,756. This market could therefore be a good entry point for buyers with limited funds.
Accessibility: Leopold is considered a gateway to the Bellarine Peninsula
Affordability: Property is relatively lowpriced, with units selling for less than $400k
