In October, Melbourne’s property market emerged as the strongest performer amongst Australian capital cities.
PropTrack’s latest Home Price Index reports that the city’s median home price increased by 0.49%, with growth in both the house and unit market. This signals what experts, including senior economist Eleanor Creagh, believe could be a turning point following six consecutive months of declining values.
She attributes this growth to prospective buyers taking advantage of Melbourne’s relative affordability and increased market supply, some of which is a result of landlords selling their investment properties.
This trend has presented excellent opportunities for first-home buyers to purchase homes similar to those they may have instead rented. Lending data provided by the Australian Bureau of Statistics supports this. It showed that in the year to August, 24.6% of the loans granted across Victoria were for first-home buyers, marking a 15% increase year on year. This, in turn, has led Melbourne to report the biggest annual rise in vacancy rates across the capital cities. According to PropTrack research, available rentals have increased for seven consecutive months, with Melbourne now having the second-highest vacancy rate nationwide.
At their most recent meeting, the Reserve Bank of Australia once again held interest rates steady at 4.35%, a decision that most leading economists had predicted. Tim Lawless of CoreLogic believes this will boost household confidence further. This will be positive for the housing market, but he doesn’t believe this will deliver stronger outcomes until borrowing capacities improve and barriers to mortgage serviceability assessments are reduced. He says, “A potential rate cut is on the horizon, but timing remains uncertain. While economists expect rate cuts possibly in the first quarter of next year, financial markets are more conservative, predicting rate reductions closer to mid-year 2025”.
You still have time to make 2024 the year you realise your property dreams. To discuss your options, contact your local Noel Jones agent via phone or at noeljones.com.au
