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The impact of global events on Melbourne’s house price history

5 mins read
melbourne house price history

Melbourne’s real estate market has been known for its steady growth in the past decade, making it an appealing location for property investments. One of the primary attractions of Melbourne’s housing market is its diverse range of properties with varying price ranges, catering to different income segments. However, like any other city, Melbourne’s house prices have been subjected to various factors that influenced its market trends, among which the global events played a significant role.

The housing market in Melbourne, like any other city, is influenced by a wide range of factors. From supply and demand to economic and global factors, the dynamics of the market change constantly. Global events have led to uncertainty and unrest in the international market, leading to a domino effect that impacted Melbourne’s housing market. In this article, we will discuss some of the significant global events that have influenced Melbourne’s house price history in the past decade.

The Global Economic Crisis (2008)

The Global Economic Crisis in 2008 impacted the housing market across the world, Melbourne’s houses prices were not left out of this downturn. Many homeowners were forced to sell their houses to avoid foreclosure, leading to a market flooded with properties. Due to oversupply and reduced demand, house prices fell by up to 10%, and it took almost three years for the market to recover.

Increased Asian investment (2011-2017)

The influx of buyers from China and other Asian countries contributed to Melbourne’s housing market’s growth from 2011 to 2017. Chinese investors comprise the most significant share of foreign investors in the residential property market, accounting for almost 25% of all real estate investments in Melbourne. This growth led to increased demand and competition, resulting in higher house prices, particularly in the high-end property segment.

Suburban Migration (2015-2018)

The shift towards suburban living from the CBD increased the demand for homes in the suburbs significantly. Homebuyers were drawn to the affordable and spacious properties available in the suburbs. This migration led to a surge in demand, resulting in an increase in house prices, making the suburbs a more attractive option for investors.

The Australian Banking Royal Commission (2018)

The Banking Royal Commission investigated misconduct and irregularities in the financial services industry, leading to changes in the lending policies of many banks. Tighter lending rules made it harder for homebuyers to obtain loans, which directly impacted the demand for properties. The reduced demand led to a decrease in house prices in Melbourne’s housing market.

COVID-19 Pandemic (2020-2021)

The COVID-19 pandemic had an unprecedented impact on the entire world, Melbourne’s real estate market was not an exception. The pandemic led to a significant drop in demand for houses in the CBD and an increase in demand for suburbs, as more people worked from home. This shift led to a decrease in prices in the CBD, whereas suburbs faced an increase in prices.

Sub-Header: Impact of global events on Melbourne’s housing market – FAQ’s

How do global events affect Melbourne’s housing market?

Global events impact Melbourne’s housing market through its impact on economic growth, immigration rates, interest rates, and the buying patterns of foreign investors. Australia’s rise as a preferred destination for foreign investment has meant that changes in global events can impact the housing market directly.

Is Melbourne’s housing market susceptible to global events?

Yes, Melbourne’s housing market is susceptible to global events as the market is part of a global network of financial markets. Global events impact the local economy and the buying patterns of foreign investors, which indirectly influence the Melbourne housing market dynamics.

What is the current status of Melbourne’s housing market?

The current status of Melbourne’s housing market is the result of a combination of factors, including immigration trends, economic growth, political stability, and lending policies. However, given the recent COVID-19 pandemic, the housing market has seen a significant shift in demand from CBD to the suburbs, leading to a decrease in prices in the CBD and an increase in prices in suburban areas.

As a potential homebuyer or investor, staying informed is critical to make the right decisions regarding property investments. Refer to our Guide to Buying a House in Melbourne to obtain more information on Melbourne’s real estate market, its trends and growth patterns.

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