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The future of Melbourne’s housing market: Predictions based on past trends

8 mins read
melbourne house price history

Melbourne’s housing market has always been a topic of interest among property investors, homeowners, and tenants. With the growing population and increasing demand for residential properties, the housing market in Melbourne is a dynamic sector that is always changing. But what does the future hold for Melbourne’s housing market? Will the prices continue to climb, or will it reach its plateau?

The answer to these questions is not straightforward, but by analyzing past trends, we can make some predictions about the future of Melbourne’s housing market. In this article, we will explore the current state of the Melbourne housing market, look at past trends, make predictions for the future, and discuss what factors may affect the housing market in the coming years.

Current State of Melbourne’s Housing Market

Melbourne’s housing market has experienced a rapid increase in property value in recent years. According to the Real Estate Institute of Victoria, the median house price in Melbourne was $936,073 as of December 2020, an increase of 3.1% from the previous quarter. Moreover, the demand for houses remained high despite the pandemic. As a result, the city’s housing market has remained strong.

However, the housing market’s growth was not uniform, with some parts of Melbourne experiencing higher growth than others. Inner-city suburbs, such as Carlton and Southbank, saw a decline in property values as many people moved out of the city during the pandemic. On the other hand, outer suburbs like Pakenham and Point Cook experienced a significant increase in property values due to their affordability and the demand for larger properties caused by remote work and homeschooling.

Past Trends and Predictions for the Future

In the past, Melbourne’s housing market has experienced cycles of growth and decline, with periods of stagnation in between. One of the most prominent periods of growth was from 2012 to 2017 when property prices increased by an average of 11.1% per annum. However, this growth slowed down in 2017-2019, with prices only increasing by 1.3% per annum.

Moving forward, experts predict that Melbourne’s housing market will continue to grow, but at a slower pace. The National Australia Bank’s Residential Property Survey predicts a 4% increase in property prices in Melbourne for 2021. Additionally, the report also states that demand for houses will increase as many people consider buying larger homes with adequate office space and outdoor areas post-pandemic.

Factors Affecting Melbourne’s Housing Market

Several factors affect Melbourne’s housing market, some of which are within our control, while some are not. The following are some of the factors that could affect the housing market in the future:

Government Policies

Government policies such as taxation, zoning, and regulations significantly affect the housing market. Changes in taxation that affect property ownership, foreign investment and stamp duty can affect property prices. Zoning and regulations, such as height restrictions, can affect developers’ ability to build housing developments.

Population Growth

Melbourne’s population is expected to grow to 8 million by 2050, leading to increased demand for housing. This demand could lead to an increase in property prices, with competition among buyers being high.

Economic Conditions

Melbourne’s housing market can be affected by economic conditions, such as interest rates, inflation, and unemployment rates. Factors like these can affect the ability of individuals to buy homes and meet mortgage payments, thus affecting the demand and supply of housing.

Location and Property Type

Different locations and property types may see varied trends in the housing market. For instance, apartments in the inner city may not perform as well as homes in outer suburbs, especially during economic downturns. Factors such as proximity to amenities, public transport, schools, crime rates, and lifestyle preferences may also affect demand.

Tips for Prospective Buyers or Investors

If you are looking to buy property in Melbourne, it’s essential to conduct thorough research before making any commitments. The following are some tips for prospective buyers or investors:

  • Partner with a reputable real estate agent with knowledge of the local market.
  • Conduct a thorough inspection of the property before making any purchase commitments.
  • Understand the mortgage rates and terms before applying.
  • Have a realistic budget and stick to it.
  • Consider future developments such as infrastructure projects or rezoning proposals and how they may affect property prices in the area.

It’s also important to note that every buyer’s or investor’s circumstances vary, and what may be suitable for one person may not be suitable for another. Therefore, seeking professional advice from financial advisors or accountants is essential to make informed decisions.

FAQs

Q: How Can Maz Real Estate Help Me in Buying a Property in Melbourne?

Maz Real Estate is a professional and experienced agency that can help you find your dream home or investment property in Melbourne. Our knowledgeable agents have a comprehensive understanding of the local market and a vast network that allows them to cater to our clients’ specific needs. Click here to check our Guide to Buying a House in Melbourne.

Q: What is the Best Time to Enter the Melbourne Real Estate Market?

The best time to enter the Melbourne real estate market depends on many factors, such as the state of the market, the availability of funding, and personal circumstances. However, experts suggest buying during market downturns when prices are low and selling during market upturns when prices are high.

Q: What are the Benefits of Owning a Property in Melbourne?

Owning a property in Melbourne has many benefits, some of which include a strong rental market, high tenant demand, capital gains opportunities, consistent population growth, and moderate housing supply. Furthermore, Melbourne has a diverse range of properties on offer to suit different lifestyles, budgets, and investment strategies.

Conclusion

Melbourne’s housing market has always been exciting to watch, with predictions often being difficult to make. Past trends suggest that Melbourne’s housing market will continue to grow but at a slower pace. Factors such as population growth, economic conditions, government policies, and location and property type will affect the housing market in the foreseeable future.

However, with the right research, guidance, and professional advice, investing in Melbourne’s housing market can be a lucrative endeavor. It’s essential to remember that every buyer or investor’s circumstances are different, and what may be suitable for one person may not be for another. Therefore, seeking professional advice from financial advisors, accountants, or real estate agents is crucial to make informed decisions.

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