Melbourne apartment prices have historically been approximately 20-25% more affordable than Sydney, however the current price difference inner city apartments is over 45% meaning there is plenty of upside potential in Melbourne.
Melbourne home prices are rising from a lower base providing a higher proportionate gain.
Many leading economic forecasters believe there is an undersupply of new housing in Victoria. High consumer confidence motivates people to make more long term decisions such as purchasing a new home. Improved immigration numbers. Melbourne’s population is now increasing at a faster rate than many other capital cities leading to an increase in the demand for housing. Population growth is around 4%. and things are looking pretty positive for the garden state’s capital city property market.
In fact Melbourne has been the prime performer over the past 12 months, with the median house price hitting a new record of $524,500 in September and median unit prices breaking the $400,000 barrier for the first time.
The Melbourne property recovery was initially fuelled by first home buyers, but now established home buyers are upgrading and investors have returned to the market. Not surprisingly, leading the median price increase in Melbourne were the inner city suburbs that traditionally attract greater capital growth over the long-term. Investors are well advised to stick with these areas, particularly around the bayside and eastern corridors, as they have lasting appeal for both tenants and owner occupiers and always outperform the average. Again, this is largely due to those infrastructure drivers like transport, shopping and schools.
The upper end markets are making a comeback in Melbourne after stalling for much of the past year, with many blue ribbon areas experiencing increased competition at weekend auctions. Over the past 10 years Melbourne medians have performed well, with an average increase of 10.16% per annum for houses and 9.88% cent for units.
Improved economic activity is expected in Victoria over the coming months as unemployment levels drop and consumer confidence continues to rise. Add to this Melbourne’s ever increasing population and the ongoing housing shortage