Melbourne Real Estate Predictions for 2018

Melbourne skyline

If you’re in the market to purchase property in 2018, Melbourne remains one of the most popular places to buy thanks to its reputation as being one of Australia’s most liveable cities combined with a stable and diverse economy.

For many years now, investors and overseas buyers have had ready access to funding through the big four banks. With housing loans representing over 60 per cent of lending in the Australian banking sector, Australian Prudential Regulation Authority (APRA) has been ramping up measures to restrict loans to investors amid recent fears of a real estate bubble. As a result, investors and overseas buyers are far less prevalent in the current market, resulting in less competition.

Persistent speculation about a housing crash, tightening restrictions and signs of a cooling are all creating uncertainty about house prices in 2018. However, long term trends indicate that Melbourne will continue to lead the country for growth over the next couple of years and house prices will continue to rise at a modest pace.

Predictions for Houses and Apartments

House prices in Melbourne are tipped to rise 5.5 per cent in 2018 and then 3.4 per cent in 2019 according to predictions made by around 300 property professionals in the latest NAB Residential Property Survey. While these figures indicate a slowdown from the 9.5 per cent and 8.6 per cent figures recorded in 2016 and 2017 respectively, these gains are still expected to be some of the highest experienced by Australian capital cities.

The outlook for apartments is more uncertain, with many experts expecting prices to fall due to a surge in supply. Higher rates on interest-only and investor loans may also cause a reduction in demand from investors who have favoured purchasing units during the boom. Apartments, however will be the more affordable option for owner-occupiers looking to purchase a property over the next couple of years.

Anticipation of Property Tax Reform May Affect Predictions

One major unknown in the housing market is whether anticipation about Labor’s planned changes to property tax are causing investors to bring forward their buying decisions. Any reforms would be “grandfathered”, meaning any properties bought before legislation is passed will be unaffected by changes to negative gearing and capital gains discounts.

If this is the case and slowed investor spending includes property purchases, expected buyers in current forecasts could vanish. Thus buyers who are considering waiting for the market to cool down may benefit if they’re prepared to gamble on the likelihood of this happening.

Which Areas Are Most Popular?

Eastern suburbs like Ringwood, Blackburn, Mitcham, Box Hill, Balwyn, Camberwell, Doncaster and Glen Iris continue to be highly popular areas for investors and buyers due to their unique neighbourhood qualities and access to amenities.

The median (house) prices recorded for these areas as of September 2017:

  • Balwyn – $2.2m
  • Camberwell – $2.2m
  • Glen Iris – $1.9m
  • Box Hill – $1.8m
  • Doncaster – $1.4m
  • Blackburn – $1.4m
  • Mitcham – $1m
  • Wantirna – $975,000
  • Ringwood – $870,000

Those looking for a more affordable property should look at surrounding suburbs. Generally speaking, the closer properties are to amenities like schools, shops and public transport, the more expensive they’ll be.

Share:

More Posts

Effects of COVID-19 on our interior trends

Having lived a whole year through a world pandemic, as human beings we’ve all undergone significant changes. This in turn has had a huge impact on our environment and in particular our interiors. We are now spending more time working from home and have more leisure time at home, so we’ve been reflecting on where we live and what we

Autumn – an opportune time to sell

The season festooned with the glorious hues of yellows, red and oranges isn’t traditionally the most popular time to put your property on the market. Spring and summer are usually favoured for pegging that “For Sale” sign up, but after a tumultuous year like no other, autumn is now shaping up as the golden time to sell. Have you been

December Quarter Update

2020 was a year in which we witnessed an array of challenges on a global scale, with many industries suffering greatly at the hands of the COVID-19 pandemic. And with a stringent set of restrictions placed on Melbourne’s Real Estate industry for much of the year, it was uncertain how things would unfold for the final quarter, once we moved

Pantone Colour of the Year 2021

At the end of every year, Pantone – the world’s most influential colour institute announces their colour for the coming year. The design world eagerly awaits this very well considered decision, as it dictates the coming trends in all things design. This year is a little different as they have chosen two hues to be the colours that represent the

Send Us A Message