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Melbourne’s housing apocalypse: What you need to know

5 mins read
melbourne house prices to drop

Melbourne’s housing market has been experiencing a significant downturn lately, leaving potential buyers and sellers unsure of what to do. With various factors contributing to this shift, it’s easy to become overwhelmed and panicked by the situation. However, by taking the time to understand the current climate and considering your options, you can make informed decisions that benefit you in the long run.

If you’re looking to buy or sell property in Melbourne, it’s essential to know what you’re up against. Over the past few years, the city has consistently ranked as one of the most expensive places to purchase property globally. However, a recent drop in property prices has left some buyers hesitant to enter the market due to uncertainty about what the future holds. Conversely, some sellers are struggling to get the asking price for their properties and are concerned about how long they will have to wait until the market picks up again.

Factors Contributing to Melbourne’s Housing Downturn

There are several aspects to consider when looking at Melbourne’s current housing market downturn. Some key factors include:

Oversupply of Apartments

Melbourne has seen a massive increase in apartment developments over the past few years, leading to an oversupply in some areas. This surplus has resulted in fewer buyers, decreased demand, and higher vacancy rates. Additionally, many of these developments are subpar, which has resulted in a drop in the overall quality of the city’s apartment stock.

Tighter Lending Restrictions

The Australian Prudential Regulation Authority (APRA) has implemented stricter lending restrictions, resulting in less available credit for buyers. Fewer buyers lead to less demand and lower property prices. Moreover, the Royal Commission into Misconduct in the Banking, Superannuation, and Financial Services Industry has further impacted the availability of credit.

Economic Uncertainty

Global economic instability and domestic political uncertainty have contributed to increased caution amongst buyers, sellers, and developers alike. Uncertainty has led to a lack of confidence in the market, and many people are opting to sit and wait it out.

Should You Buy or Sell in Melbourne’s Housing Market

If you’re looking to sell your property, consider getting a professional valuation and consulting with real estate agents. It’s essential to set a realistic asking price and have patience, as it may take longer to sell your property in the current market. Additionally, consider making improvements to your property to increase its value and attract potential buyers.

On the other hand, if you’re a buyer, now may be a good time to enter the market if you’re financially stable. Due to the oversupply of apartments, it’s a buyer’s market for apartments. This means buyers have more bargaining power, the ability to negotiate a better price, and potentially find a property that may not have been available before. Bear in mind, however, that tighter lending restrictions may make it harder for you to secure financing.

FAQs

Can I Still Get a Mortgage?

Yes, you can still get a mortgage. However, with the stricter lending restrictions, it may be more difficult, particularly if you don’t have a large deposit or a stable income.

Is Now a Good Time to Buy Property in Melbourne?

Yes, if you’re financially stable and looking to purchase property, now is a good time to enter the market. Take advantage of the buyer’s market and secure a property at potentially lower prices than usual.

What Can I Do if I Can’t Get the Asking Price for My Property?

Consider reevaluating the asking price of your property and consulting with a real estate agent to determine a realistic price. Additionally, invest in improving your property to increase its value and attract more buyers.

Conclusion

Melbourne’s housing market is going through a rough patch, but it’s essential to stay calm and informed when making any decisions. If you’re looking to buy or sell property, consult with professionals and take into account the current market conditions. With the oversupply of apartments, it’s a buyer’s market, and buyers can potentially secure properties at lower prices. Overall, be patient and consider all options before making any significant moves. And if you need further guidance, check out this Guide to Buying a House in Melbourne, which could provide more valuable information.

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