Melbourne, the capital city of Victoria, Australia, ranks among the most populous cities in the country. The city’s real estate market has experienced an upward trend over the past decade, making it an attractive location for property investors globally. In recent years, Melbourne’s property market has experienced steady price growth, with an increase in demand for properties in sought-after areas such as the Central Business District (CBD), St Kilda, Richmond, and South Yarra.
Melbourne’s housing market has experienced steady growth since 2012, and this trend is expected to continue. Thanks to its vibrant lifestyle, employment opportunities, quality schools, and top-notch healthcare services, Melbourne remains a top destination for people looking to buy homes in Australia. But what factors have influenced Melbourne’s house price trends over the past decade, and what is the future of this fast-growing real estate market?
Population Growth and Increased Demand for Housing
The growing population is a significant driving factor in Melbourne’s real estate market’s steady growth over the past decade. As more people migrate to the city in search of better employment opportunities and a good lifestyle, there is a high demand for housing. The demand for property in certain areas has pushed prices up, making it challenging for first-time buyers to enter the market.
Foreign Investment
Foreign investment has also contributed significantly to the growth of Melbourne’s property market. Many foreigners, particularly from China, have been attracted to Melbourne’s properties due to its lifestyle, quality education, and greener environments. Foreign investment has increased demand for housing, especially in areas favored by foreign investors, such as South Yarra, Docklands, and St Kilda.
Infrastructure Development
Melbourne’s property market has been impacted positively by significant infrastructure development in the city. New transportation networks such as expressways and railways linking residential suburbs to the city center have increased the accessibility of housing. This has heightened demand in areas that were once far-flung from the city center, making previously remote areas more attractive to buyers.
Factors Influencing the Melbourne Housing Market in 2021
Impact of Covid-19 Pandemic
The Covid-19 pandemic has caused a significant impact on Melbourne’s housing market. Restrictions that were implemented to curb the spread of the virus negatively impacted the market in some sectors. Economic challenges caused by the pandemic have also made it challenging for first-time buyers to purchase homes. However, this hasn’t significantly impacted the market’s growth due to continued investment from foreign buyers and government support.
Low Interest Rates
Low-interest rates throughout 2021 have made it easier for buyers to apply for loans and finance their property purchases. Low rates have increased demand for properties due to their affordability, hence pushing prices higher in the most sought areas.
Increased Government Support
Increased Government support through incentives such as the First Home Loan Deposit Scheme (FHLDS) has made it easier for first-time buyers to enter the market. Tax incentives, such as negative gearing and capital gains tax exemptions, are attracting investment in the market.
FAQs
What are some of the most popular areas to buy a house in Melbourne?
Melbourne’s most popular areas to buy a house include the Central Business District, St Kilda, South Yarra, Carlton and Richmond, and Docklands.
How much does a house in Melbourne cost on average?
The average cost of a house in Melbourne as of 2021 is $740,000.
What do I need to know about buying a house in Melbourne?
To purchase a house in Melbourne, you need to have enough funds to finance your purchase. It’s advisable to work with a buyer’s agent or a professional real estate agent when selecting your preferred property, negotiating the deal, and completing the purchase. You may also want to consider factors such as location, amenities, property condition, and future market value when purchasing your property. For more information, check out our Guide to Buying a House in Melbourne.
Conclusion
Melbourne’s real estate market has experienced steady growth over the past decade, and this trend is expected to continue. With its growing population, quality education, and employment opportunities, Melbourne will continue to attract domestic and foreign investors looking to buy homes in Australia. Factors such as infrastructure development, low interest, and increased government support will also fuel growth in the Melbourne real estate market. While challenges such as the Covid-19 pandemic may impact the market in the short-term, the overall outlook for Melbourne’s real estate market is positive.
