/

Melbourne housing market takes a dive: Prices set to plummet

7 mins read
melbourne house prices to drop

The Melbourne housing market has been one of the strongest and most stable markets in the country, but its days of glory might be over. Experts are warning that prices are set to plummet, leaving many homeowners in a precarious situation. This is due to a combination of factors, such as the impact of COVID-19 and ongoing oversupply of properties.

If you’re a homeowner or prospective buyer, you might be wondering what this means for you. In this comprehensive guide, we’ll explore the ins and outs of the Melbourne housing market, including the challenges it’s currently facing, the opportunities it presents, and what you can do to navigate this uncertain landscape. Whether you’re planning to buy, sell, or hold on to your property, this guide will provide you with the information you need to make an informed decision.

The State of the Melbourne Housing Market

The Melbourne housing market has been on a rollercoaster ride in recent years, with prices soaring to record levels before hitting a rough patch in 2018. In 2019, the market regained some of its strength, with median house prices in the city increasing by 2.2% over the year. However, the COVID-19 pandemic has created a lot of uncertainty and volatility in the market, with many experts predicting a decline in property values.

The Impact of COVID-19

The COVID-19 pandemic has had a profound impact on the Melbourne housing market, with many buyers and sellers putting their plans on hold. The strict lockdown measures have made it difficult for people to inspect properties, hold auctions, and conduct other essential activities. Additionally, the economic fallout of the pandemic has left many homeowners struggling to keep up with their mortgage payments, leading to a potential increase in distressed sales.

Oversupply of Properties

Another challenge faced by the Melbourne housing market is the oversupply of properties. According to a recent report by Domain, there were a total of 55,000 dwellings in the pipeline across Melbourne as of June 2020, which is equal to approximately three years of supply. This is due to the construction boom that took place in recent years, which led to a significant increase in the number of new homes and apartments.

Recent Trends in the Melbourne Housing Market

Despite the challenges faced by the Melbourne housing market, there are some recent trends that are worth noting. These trends can provide valuable insights for buyers and sellers who want to make the most of the current market conditions.

Decline in Median House Prices

The most significant trend is the decline in median house prices in Melbourne. According to Domain’s State of the Market report for the June 2020 quarter, median house prices in the city fell by 3.5% over the quarter, the steepest decline since the global financial crisis in 2008. This decline is expected to continue in the coming months, with some experts predicting a double-digit drop in prices.

Increased Activity in the Rental Market

Another trend worth noting is the increased activity in the rental market. Many property owners who were planning to sell their homes have decided to rent them out instead, given the current market conditions. This has led to a significant increase in the number of rental listings in Melbourne, providing renters with more options and negotiating power.

What to Do If You’re a Homeowner or Prospective Buyer

If you’re a homeowner or prospective buyer, you might be wondering what steps you can take to navigate the Melbourne housing market. Here are some tips to consider:

Homeowners

If you own a property in Melbourne, here are some things you can do to protect your investment:

  • Stay up-to-date with the latest market trends and conditions.
  • Consider refinancing your mortgage to take advantage of lower interest rates.
  • Be prepared to negotiate if you’re looking to sell your property.
  • Keep your property in good condition to attract potential buyers or renters.
  • Consider renting out your property if you’re struggling to sell it.

Prospective Buyers

If you’re looking to buy a property in Melbourne, here are some tips to consider:

  • Do your research and look for properties that offer value for money.
  • Attend property inspections and auctions to get a feel for the market.
  • Be patient and don’t rush into making a purchase.
  • Consider negotiating with sellers to get a better price.
  • Get pre-approved for a mortgage to have a better chance of securing a property.

FAQs

Q: Should I invest in the Melbourne housing market?

A: If you’re considering investing in the Melbourne housing market, it’s important to do your due diligence and consider the current market conditions. While there are certainly challenges facing the market, there are also opportunities for investors who are willing to take a long-term view. Factors such as population growth, strong infrastructure, and a stable economy can make Melbourne an attractive investment destination.

Q: How do I buy a house in Melbourne?

A: If you’re looking to buy a house in Melbourne, there are several steps you’ll need to follow. These include researching the market, getting pre-approved for a mortgage, attending inspections and auctions, negotiating with sellers, and finalizing the purchase. For a more detailed guide, check out our Guide to Buying a House in Melbourne.

Q: Should I sell my property now or wait?

A: The decision to sell your property depends on a variety of factors, such as your financial situation, your long-term goals, and the current market conditions. If you’re keen to sell your property but are concerned about the market conditions, consider negotiating with potential buyers to get a better price. Alternatively, you could consider renting out your property and waiting for the market to pick up before selling.

Leave a Reply

Your email address will not be published.

Latest from Blog