Racing house values in October and immigration enters the affordability debate.
Over October’s five weekends there were in excess of 3,392 auctions reported to the Real Estate Institute of Victoria (REIV). More than 2,750 sales were recorded. Approximately 642 properties passed in with 274 of those on a vendor bid. The clearance rate averaged 80%, still climbing from last month’s 79% and sharply up on last year’s October average of 70.3%.
Pundits and researchers keep coming up with new and conflicting interpretations of what’s happening in Melbourne’s house market, but without a doubt 2016 keeps charging forward. With no shortage of demand and ever rising clearance rates, the result is stronger than expected price growth.
Data for the September Quarter shows a 3.1% rise in the median house price to a record $773,669. This makes for an annual rise of 9.1%. Averaged apartment prices went up too in the quarter, by 4.5% to $466,779. Both rises were the best figures for any city in Australia, and higher than predictions.
Just like a Melbourne Cup there were October favourites – the Outer East, the North and the Inner City had some of the highest October clearance rates, all nudging 90%.
A report in October pointed out some under-performing favourites too, as the crackdown on foreign investment continues to impact. North Balwyn, Doncaster and the Waverleys registered price falls over the past year. But considering the price growth these suburbs have enjoyed (North Balwyn’s house values grew 87% from 2012 to 2015) some adjustment is not surprising.
Housing affordability remains controversial with The Australian Population Research Institute (APRI) joining the debate in October with compelling figures claiming immigration is the biggest reason young Melbourne families are being priced out of house ownership. Melbourne is adding 7,200 new people every month, which is Australia’s highest growth. This includes many new families who are competing for new family-friendly houses with land. This lifestyle is a main attractor for immigration. In the decade going forward from 2012 it’s estimated this category will buy 50% of the new housing stock in Melbourne and 60% in Sydney.
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