It has been a busy, exciting start to the year for the real estate industry, with the state government stepping in to assist struggling first home buyers and pledging to provide more housing and infrastructure to handle our ever expanding city.
Premier Daniel Andrews unveiled plans to axe stamp duty on first-home buyer purchases of $600,000 or less from July, with discounts for properties between $600,000 and $750,000 on a sliding scale.
The Victorian Government has vowed to create 17 new Melbourne suburbs over the next two years in a bid to tackle housing affordability. This should result in more first time home buyers being able to break into the competitive housing market.
The need for additional suburbs was highlighted after it was revealed that Melbourne experienced 17 per cent growth in house prices last year, with its yearly new resident intake of over 100,000 putting strain on supply.
These new suburbs will be scattered across the north, west and south eastern growth corridors of Melbourne and are set to include town centres, schools, open public spaces and key infrastructure.
Auction Volumes Soar
Auction continues to be the most popular way to sell real estate in our city, with REIV President Joseph Walton stating that the 2017 auction market is one of the strongest in recent years, with volumes up 13 per cent on the same period last year. Mr Walton added that the solid start to the year followed the strongest December in the states history in terms of both auction volumes and sales. Melbourne’s current clearance rate sits at a healthy 82 per cent, up by 3 per cent from this time last year.
New Benchmark for Prestige
The top end of Melbourne’s property market contributes heavily to the weekend auction tally, with $2 million homes now replacing $1 million, as the new entry point to buy prestige. Latest CoreLogic figures show 11 Melbourne suburbs have a median house price in the $2 million range, up from seven at the same time last year.
WBP Property Group executive chairman and co-founder Greville Pabst said the scarcity of quality family-sized homes within 10km of the CBD along with the booming population were key drivers of price rises. Six more suburbs are on the brink of $2 million: Armadale, East Melbourne, Glen Iris, Mont Albert, Eaglemont and Parkville all have median prices of $1.8 million-plus. Toorak remains Melbourne’s most expensive suburb with its $4.169 million median price well ahead of its nearest rivals in the $2 million bracket.
Eastern Suburbs Spotlight
The first quarter of 2017 saw steady price growth across all areas serviced by our nine offices.
Glen Iris, Camberwell East, Ringwood and Mitcham have continued to remain hot spots this year, with buyers paying a premium for the opportunity to buy into the area. In Mitcham, factors pushing this growth are terrific school zones and state of the art transport; including EastLink and the new underground Mitcham and Heatherdale Stations. The median price for a four bedroom home has nudged above the $1 million mark and isn’t predicted to abate anytime soon.
Suburbs tipped for future growth are Forest Hill, Croydon South and Bulleen, with Bulleen experiencing a noticeable generational change due to the age demographic of the area and its evolving landscape of new redevelopments and larger prestige homes. Sales in Bulleen have been achieving well into the $2 million dollar range with the $3 million barrier not too far away.
In January, the National Australia Bank announced it would raise its standard variable rate to 5.32 per cent for owner-occupiers and 5.8 per cent for investors come end of March. This rate hike was announced just hours after the US Federal Reserve lifted its key interest rate, in a move that is likely to have a flow-on effect across all four major banks. The Reserve Bank of Australia has not shifted its official cash rate which remains at a historical low of 1.5%.
As always, if you have any questions about buying, selling, investing or renting get in touch with your nearest Noel Jones office. We’re located at Balwyn, Box Hill, Blackburn Camberwell, Doncaster, Glen Iris, Mitcham, Ringwood, and our new location Wantirna.
Source: CoreLogic, Herald Sun, news.com.au & reiv.com.au