Although a fickle creature by nature, the Melbourne property market is something that you should be monitoring if you hope to buy or sell a house this year.
We can now refer to 2020 as many things, and “surprising” is a term that can be applied to the Australian property market in regards to its resilience. With rising unemployment (or underemployment), a reduction in consumer spending and a shaky economy, it’s understandable as to why buyers may not have the same confidence as they once had.
However, the arrival of Covid-19 has appeared to be more of a temporary pause as opposed to the cataclysmic hit that was initially predicted. Although it’s changing how and where we live, 2020 saw Australians pocket an unprecedented $110 billion in personal savings. Cashed up with pre-approvals and sizable deposits, our real estate market is expected to hit double digits in terms of growth patterns for 2021 – but how is it looking for Melbourne?
Melbourne Property Market Predictions For This Year
After experiencing what was arguably the toughest lockdown measures in the country, Melbournians are itching to get back into real estate. With historically low interest rates, a lack of spending, government funding and incentives, for buyers 2020 provided a window of opportunity where if your circumstances allowed, it was actually cheaper to buy than rent for many living in the inner city and fringing suburbs.
Surprisingly, Melbourne’s property prices have staged an unprecedented comeback, and as of January 2021 have soared past the pre-pandemic pricing records. The median house price in Melbourne now sits at $936, 073, after seeing a rise of 5.3% in the last quarter of 2020. The previous record high median was $907, 600, which was recorded in the March quarter just before the Covid-19 pandemic arrived to our shores.
Although there’s been some significant debate as to whether we can expect 2021 to be a buyers or a sellers market, there are some significant predictions that are sure to affect both parties – so what do you need to know about the forecasts for the Melbourne property market this year?
Treechange vs Seachange – The prospect of another long term lockdown in a unit or apartment was evidently too much for many Melbournians, and in turn they have been escaping the city in droves. With the hunt for lifestyle properties increasing, it’s no surprise that the Mornington Peninsula saw a whopping 25% increase in property sales in 2020.
The Rise Of The First Home Buyer – With the range of government incentives such as the First Home Buyers Grant and HomeBuilder, record levels in cash savings, and a market that’s been ripe for the picking – 2020 created the perfect storm for first home buyers, with entry level buyers still entering the property market in record numbers as we head into 2021.
Auction Slow Downs – Property auctions slowed to all but a crawl during 2020’s ongoing lockdowns in Melbourne. While social distancing measures have since relaxed, consumer confidence hasn’t quite bounced back to where it was. Buyers aren’t likely to embrace property auctions until the workforce and economy stabilizes, ideally sooner rather than later.
CBD Apartment Oversupply – When considering the mass exodus from the inner city, financial pressures faced by Millennials and Gen Z, plus the lack of international students, CBD units and apartments have fallen flat in the Melbourne property market. The lack of demand has also put pressure on new builds and constructions.
Good News For Renters – Oversupply such as the inner city apartment blocks outlined above and a lack of tourists has spelled good news for renters. Short term accommodation rentals such as spaces previously occupied by Airbnb have also returned to the long term rental pool, meaning more flexibility and options for those not looking to buy just yet.
Where To Source Help With Navigating The Melbourne Property Market
A completely free service, Emergency Services Property Advisers provide property adviser services to Police, Fire and Ambulance 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.
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 Advisers today to discuss how we can turn your real estate dreams into reality or call Luke directly on 0414 757 705.
