Melbourne Property News Monthly Wrap – July 2023

Melbourne market recovering, as interest rates stay on hold

Over July’s five weekends the Real Estate Institute of Victoria (REIV) recorded more than 2,622 auctions. 1,706 properties sold. 1,254 at auction, with 556 passed in. 452 properties were sold before auction & 0 properties were sold after auction. The clearance rate averaged 75.5%, down on June’s 79%.

Melbourne values on the mend

Melbourne house prices are slowly rising again as the city keeps getting its vitality back and the population exodus to the regions is reversing. CoreLogic claims Melbourne values rose a marginal 0.25% over July. Across the June quarter house values rose by 0.4%, to a median of $1,027,996. Demand is strong, making it a good time to sell and Vendor Marketing has the expertise in all the vital steps that will maximise your sale price!

Good news as interest rates stay on hold

Borrowers are relieved to hear the interest rate was held steady at 4.1% this week, with inflation easing back to 6% in the June quarter.

The turnaround is spreading

The Melbourne value turnaround began most noticeably in the inner east, with growth spreading to other areas. Lower Plenty is currently the best performing suburb (median $1.41 million) with values shooting up 17.5% in a year. It’s because Lower Plenty offers the best of both worlds – an escape to large blocks with rural atmosphere, but still in metro Melbourne.

But investors and landlords are nervous

More landlords are selling up after the State government, desperate for revenue, introduced the new land tax on investment properties. But not all investors or landlords have deep pockets – Tax Office data shows the top 5 professions of landlords includes nurses and teachers. Investors like these, and there are plenty, are already walking a fine line.

They are now rattled further after hearing the State government is considering rent controls and related caps, in particular putting a ban on rent rises for two years. This would give owners no way to respond and adjust to rising operating costs. The result will be more investors fleeing the market and less rental properties, adding to the current rent crisis.

Rents still shooting up

When the new land tax on investors was announced anecdotes poured in from real estate agents predicting that landlords would simply increase rents to cope with the extra expense. The proposed rent caps we are hearing about is Daniel Andrew’s reaction to that.

Rents In Melbourne are already at an all time high. Unit rents up by 10% more than before the pandemic. It’s tougher in Sydney where rents are nearly 20% higher!

Craig Knudsen
Principal Advisor
Vendor Marketing

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