While property growth in Melbourne is expected to slow overall this year, there are still opportunities for home buyers and investors.
The REIV expects slower, more sustainable growth across the city and all the signs should encourage buyer interest. Interest rates are low and expected to remain that way and the latest economic confidence figures are very strong.
More importantly, the “hot” property market that we saw last year is expected to moderate throughout 2016.
The major tip for buyers is to continue to do your homework. And don’t be deterred if homes in your preferred suburb appear to be out of your price range as opportunities still exist – it’s worth investigating prices in different parts of the suburb and comparing the various options.
For investors, there will still be opportunities in a range of suburbs, especially as Melbourne’s inner ring popularity continues to flow into middle and outer suburbs – with these regions growing in value in the past six months.
Some suburbs to watch between now and year’s end include:
Preston (Median house price: $815,000)
Has seen solid growth in recent months, reflected in strong private sales activity (median number of days on market declined seven days in 2015). Located within 10km of the CBD, Preston’s median house price remains well below the inner Melbourne median of $1,236,000.
Epping (Median price: $432,750)
Located on the fringe of Melbourne’s middle ring, Epping recorded solid price growth in 2015, driven by a strong private sale market. Poised for further increases in the coming 12 months.
Burwood East (Median price: $1,004m)
A big growth area with extensive development underway at present. While the median house price is high, days on market continue to fall (down from 37 days in 2014 to 30 days in the past 12 months) showing increasing buyer interest.
Montrose (Median price: $600,000)
Has a relatively affordable median house price for those buying in Melbourne’s east and has shown good signs of capital growth in the past 12 months (up 10%). A significant drop in median days on market in 2015 (down 11 days to 19 days) has resulted in a strong private sales market.
Seaford (Median price: $530,000)
Bayside and has experienced strong growth in the past six months. Like Sunshine, is also very affordable. Strong private sales activity and clearance rate.
Chelsea (Median price: $727,000)
Close to the bay and with good transport to the CBD. Saw a strong private sale market and solid auction activity in 2015 as well as double-digit annual growth. Should be a solid year ahead.
Footscray (Median price: $780,000)
Close to the CBD and recorded double-digit growth in 2015. Footscray remains affordable given its location in Melbourne’s inner ring. Improving infrastructure and gentrification likely to result in solid long-term growth.
Altona (Median price: $710,125)
Close to the CBD (13km) and to the bay and has seen double digit growth in 2015. Private sales market tightened in 2015 and clearance rate increased, despite listings being up 17 %.
Sunshine (Median price: $530,000)
Still offers very affordable buying and is within 11km of the Melbourne city centre. Larger land blocks are proving attractive to both buyers and developers.
Spotswood (Median price: $775,000)
Another inner west Melbourne suburbs which is poised for further growth in 2016. Despite listings increasing significantly in 2015, the median days on market fell 23 days and clearance rate improved 13%.