The downturn in the housing market became obvious in 2018, and most experts predict this trend will continue in 2019.
Figures from property data firm CoreLogic show that home values in Melbourne fell by around 7 per cent in the last twelve months, with the median home value sitting at $645,123. This level was last seen in February 2017. By way of comparison, Sydney’s market dropped almost 9 per cent over the same time, with the median home value at $808,490, a figure last seen in August 2016.
The CoreLogic data also showed a diversity in housing market conditions; the market varies depending on the location of the suburb and the price point of the market.
Outside of the cyclical nature of the property market, one reason for this was tightening of lending standards brought about by the financial services royal commission.
Despite this, there is still significant building of new apartments and detached housing, meaning that supply will continue. With the continued population growth in Victoria – it runs at around 2 per cent based on official figures – there is still demand for new homes, especially in Melbourne where most people coming to Victoria choose to settle.
“It’s still a lot of people arriving in Victoria, particularly Melbourne, and that’s a lot of people that need a roof over their head,” says Housing Industry Association senior economist Geordan Murray. With rental vacancies at low levels, Murray sees that the new supply will be needed.
Most of these arrivals to Melbourne look to live within 12 kilometres of the city and those with or planning families look to be close to schools or transport to schools.
Even with the downturn in the market, good opportunities for real estate investment could exist if the right suburb and property is located. Key to your investment strategy is taking a long term view. Property Investment Professionals of Australia chairman Peter Koulizos advises, “When you look at last year’s figures then it was a very bad year. But if you bought in virtually any capital city 10 years ago you’re still in front. You just need to keep that in perspective.”
If 2019 is the year for you to invest in property, then Accrue Real Estate have the staff and expertise to help you realise your property investment goals.