What’s the 2020 vision for property in Melbourne?
On February’s first weekend more than 265 auctions were reported to the Real Estate Institute of Victoria (REIV). Approximately 183 sales were recorded. 82 properties were passed in, 37 of those were on a vendor bid. The clearance rate averaged 69%. This was up on the first weekend of February 2019 which posted a clearance rate of 58%.
The good news for 2020 is that REIV reports that In the last 2 quarters house values have climbed by 8.2%. So we are nudging the 2017 peak now. Melbourne’s median house value rose in the December quarter to $859,500, which is the highest on record.
So we are starting the year with an energised market. Mostly led by the inner city suburbs. Supply has improved and demand is strong. And although it’s early, most analysts are predicting substantial value growth this year. This is great for home sellers who plan well.
The more optimistic analysts are predicting significant value gains. ANZ has predicted a 12% rise. NAB is more cautious with +7.4%.
But as usual value rises are likely to be patchy, with local conditions making some suburbs surge and others move slowly. For example, according to the December Quarter Domain House Price Report, East St. Kilda bounced back hugely in 2019 with a year on year value gain of 23.6%. But immediate neighbour, Elsternwick, was down by -9.1%. Burwood had the biggest drop in 2019, going down -16.2% (Domain). But this is because values had inflated so dramatically there by 2017.
Melbourne unit values have surged in the three months to December, rising 5.6%, taking the median to $549,781 (Domain). The rises were mostly in middle ring suburbs. Units are continuing to feature as a more affordable option than detached houses.
Challenges to the economy right now include the ongoing fallout from the bushfires. Plus the Coronavirus. And that’s just January, so who knows what the year will bring.
A classic Melbourne sale in January’s last week was a big Beaumarice beach box that went $100,000 past reserve to sell for $450,000. They certainly love their beach days down there.
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