While the Victoria real estate market certainly has been interesting to observe in recent months, where are we sitting as we enter the second half of 2021?
Most of us are all too aware of the fact that Melbourne was affected by a double lockdown in 2020, which contributed to a 5.6% drop in values thanks to the Covid-19 related downturn. However, October signalled the end of one of the world’s toughest lockdowns, and prices finally stopped falling.
Fast forward to mid July 2021, and over 13 million Australians are now back in lockdown. However, it’s not all bad news across the board, and the resilience of the Victorian real estate market is a clear indication of that.
July 2021 Victorian Real Estate Market Update
Across the nation, demand is still far exceeding supply when it comes to the Australian property sector. Melbourne house prices rose by 1.50% again in June, which saw the overall growth in the first six months of 2021 reach 9.80%. This saw the median house price in Melbourne hit $1,000,000.
Whilst this was an indeed amazing result considering the circumstances, other capital cities did still manage to outperform Melbourne in the real estate arena. Prices in Sydney have risen 15%, which saw their median price hit a whopping $1,400,000. Other cities that have shown strong growth include Brisbane at 11.6%, Adelaide at 9.2% and Perth at 9.8%. Overall, in Australia the median house price jumped by 13.5% in six months, and has mostly been driven by record low availability and low interest rates.
Across the sub-regions of Melbourne, buyers have shown the same eagerness to escape the city in favour of a tree or seachange that has been trending throughout the past year. Regional Victoria, and in particular, the Mornington Peninsula, has seen better growth, with a 15.6% increase in property prices when compared to the same period in 2020. The median house price for regional Victoria is now $516,668 and the median unit price is now $358,086. As remote workplaces become increasingly common, the traditional inner city commute has seen many former Melbournians look at property on the fringes of the big smoke that they previously may not have been in the position to consider.
While the demand for inner city apartments close to universities have slumped thanks to restrictions on international students and tourists, it may also provide a golden opportunity for first home buyers or investors to think outside of the box. The latest Victorian State Government Budget has introduced a 50% reduction in stamp duty for new homes within Melbourne city, rising to a 100% waiver of duty for homes that have spent a year or more on the market.
On top of this initiative, the Federal Government also announced lowering the age threshold in place for retirees to also access stamp duty concessions. Those aged 65 years old and up can make a downsizer contribution into their superannuation of up to $300,000 per spouse from the proceeds of selling their family home. The real kicker of this policy is that the voluntary contribution is not classed as a non-concessional contribution, meaning that it doesn’t count towards the relevant contribution caps in place. In July 2021, Treasurer Josh Frydenburg announced that the scheme was now accessible for those aged 60 and over, as a means to try and free up larger residential homes faster, and to provide the market with the homes that it so desperately needs right now.
Thankfully, the Reserve Bank Of Australia has also stated they are holding rates steady, which is reassuring for buyers looking to take advantage of the current historic low rates. Needless to say, this is going to create continued interest in the property sector, and provide an added layer of security for those looking to buy, sell and invest in the Victorian real estate market.
It is likely that interest rates won’t begin to increase until inflation grows, as this is currently being impacted by slow wage growth. In the event that measurements need to be bought in to ‘cool’ the housing market, it will most likely be through financial regulators, such as APRA.
Taking The Stress Out Of Property
A completely free service, Emergency Services Property Advisors provide property advisor services to Police, Fire, Ambulance and S.E.S personnel and their families right across Victoria.
Luke and the team at ESPA are passionate about providing support to some of Australia’s most valued public servants, and aim to provide tangible real estate advice to those in stressful positions with crazy hours at no extra cost to them. Along with key industry insights, ESPA also works with a broad range of service providers linked to the real estate industry such as conveyancers, trades, legal practitioners and mortgage brokers.
If you are an emergency services worker looking to potentially buy or sell property in the future, please get in touch with Emergency Services Property Advisors today to discuss how we can turn your real estate dreams into reality, or call Luke directly on 0414 757 705.
