Stock market storms brewing as we sail into 2018.
Between Monday the 18th of December 2017 and Sunday the 4th of February 2018 just 534 home auctions were reported to the Real Estate Institute of Victoria (REIV), resulting in 324 properties selling at auction, whilst 131 properties were passed in, with 47 of those on a vendor bid. The clearance rate for the seven week period was a keen 75%.
We blast into the 2018 Melbourne residential market with high demand, but uncertainty about what lies ahead. Stock market volatility undermines people’s confidence. But we do know Melbourne house prices supposedly rose in the December quarter by 3.2%, according to data from Domain Group. This was a different result to Corelogic’s data, which claimed the Quarterly rise was just 0.9%.
Figure-splitting aside, 2017 overall was a crackerjack year for house price growth, reaching 13.2% (REIV). This is the highest since 2010.
Melbourne home loan size hit a record high in December averaging $396,500. So buyer confidence in the market was high too in the last Quarter.
The reality is, looking forward, it’s likely price growth in Melbourne will continue – but it will depend on location. Buyers will look for value and the suburbs (both inner and outer) that can deliver it will see more price rises. Gentrification will continue also, driving values up in bridesmaid neighbourhoods too as they play ‘catch up’. Take Maidstone for instance, the last inner city suburb with values lower than the Melbourne median. Maidstone is as close to the city as Camberwell, Moonee Ponds and Elwood! The neat streets are crammed with modest bungalows ripe for demolition and development.
As predicted by Vendor Marketing, Melbourne’s fringe suburbs are experiencing sharp price hikes as first home buyers flock to take advantage of concessions introduced in July 2017. The concessions bring more demand, which of course, sends prices up!
In Melbourne, foreign buyers have pulled in their heads in a little, but are still expected to account for a big 21% of residential property purchases in the first quarter of 2018, but down on the massive 25.2% a year ago, (domain.com.au).
If anything, 2018 is shaping up to be the ‘year of the first home buyer’. Many government initiatives are in place and new ones keep appearing to help get young buyers into their first houses and apartments.
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