Forget the downturn – Melbourne’s property values could reach record heights as early as January, with strong spring results promising good times ahead for vendors in 2020.
Melbourne’s property market is on track to make a full recovery from the downturn and reach record high values by January, new research shows.
Rapid improvements in house and unit values over spring means the market may have completely corrected by early in the new year, leading property data firm CoreLogic suggests.
Property values have started to improve since June, after an 11.1 per cent drop that began at the market’s peak in November 2017, CoreLogic’s head of research Tim Lawless said.
Melbourne houses and units now sit at a median value of $650,197.
“Values only have to rise a further 5.8 per cent before staging a recovery.” Mr Lawless said.
“Considering the market was up 5.3 per cent over the past three months, the recovery phase is looking quite sharp at the moment. If the recent rate of growth is maintained, we could see Melbourne housing values reaching new record highs in January or February next year.”
He said the strong performance had been spurred on by low interest rates, looser lending regulations, renewed confidence after the federal election and population growth.
A surge in first-home buyers had also added to housing demand.
Melbourne’s inner east notched the best three month improvement in Australia, with the median dwelling values increasing 8.3 per cent to $1.135 million.
Inner city suburb values also increased 6.1 per cent to $637,465 in that time and now sit just 1.5 per cent below their peak in October 2017.
Noel Jones Camberwell agent Greg Bowring said spring was a busy time for sales in the east, with people “rushing to get deals done” before the next school year started.
“There’s been a massive turnaround in the past three months and the market was completely different a year ago.” Mr Bowring said.
“Interest rates are low, but stock levels aren’t great and people aren’t spoiled for choice. The horse has now bolted for affordability in the area.”
All Australian capital cities except Perth and Darwin have recorded a rise in dwelling values in the past three months to October.
Victoria’s capital could reach record high values by January, while Sydney is predicted to only fully recover in about six months.
Mr Lawless said while its good news for homeowners, reduced housing affordability could become a challenge for first-home buyers and low-income families.
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