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Melbourne Investment Property Market Offers Major Profit

Melbourne property market values have risen dramatically in recent years. That phenomenal growth combined with a concurrent increase in Victoria’s capital city’s local population means there’s no time like the present to enter the market for investment property in Melbourne. Despite this rosy outlook, prospective investors in the Melburnian property market should proceed with cautious optimism, as many areas have a glut of property for sale.

During 1Q 2015, the average ROI for property investment in Melbourne was the lowest of all Oz capitals at only 3.3 percent for houses and 4.2 percent for other units. Rental property experienced sluggish growth due to average house rents dropping by 1.3 percent during the last quarter, while unit rents rose just 1.4 percent. Throughout the Greater Metropolitan Melbourne area, vacancy rates hold steady at a hefty 2.7 percent. In many areas, however, overall vacancy rates hover near 6 percent. By stark contrast, average vacancy rates in high-demand mid-ring suburban neighborhoods are currently below 2 percent.

On the whole, Victoria has remained a profitable haven for investment property. This is true regardless of widespread fears of future Melbourne property market price volatility due to temporary gluts in some areas. A major influential factor in rising prices of Melbourne property for sale is strong growth of the region’s population. Indeed, most recent available statistics reveal that Melbourne’s population had the largest increase of all the nation’s capital cities, with over 95,000 new residents. This level of growth has pushed the city’s total population to almost 4.5 million, thereby making Melbourne a close runner up to Australia’s largest metropolis Sydney, with 4.8 million inhabitants.

Primary factors in Melbourne property market phenomenal gains

Melbourne investment property has consistently performed well during the last few years, mainly due to a simultaneous rise in the local population. Victoria’s populace is projected to continue its healthy growth throughout the 2015 and subsequent years. That steady growth in tandem with sporadic oversupplies gradually leveling off will keep pushing the value of property investment Melbourne in an upward direction.

Signs to watch for in the Melbourne property market

Finding and buying the right investment property in Melbourne entails advance planning and careful evaluation. Prospective buyers should focus on suburban areas with established positive features. For instead, desirable neighborhoods have general aesthetic appeal, extensive public transit service, quality schools, reputable business establishments and close proximity to major traffic arteries. The most important thing to look for is consistently strong population growth.

• Overall affordability

Residential and investment property for sale has performed well and market analysts expect that performance to continue into the foreseeable future. Melbourne property values also continue climbing when compared with comparable figures for Sydney.

• Accumulated demand

Approach the Melbourne property market cautiously during the immediate future, as some noted economic experts feel that Victoria has a glut of new housing. This perception is particularly high with respect to inner city locales in the CBD, the Docklands, St Kilda and Southbank.

• Increased public confidence

Greater consumer confidence in the property market has reportedly stimulated increased economic activity, especially major financial investments like new home purchases.

• Boost in immigrant populations

Melbourne’s population is currently rising faster than that of all other Australian capitals except Brisbane and Perth. This rapid growth will eventually trigger a rise in overall demand for investments and new housing. At about 2 percent, Melbourne’s population growth exceeds the nationwide average of 1.8 percent.

Synopsis of 2015 and beyond

The capital growth of investment property and net rental revenue are measured by an Annual Return Index that’s designed to provide a valid basis of comparison across Australian cities. The market for property investment in Melbourne started with a bang in 2015, with no end in sight during the near future. Would-be speculators should be selective about where they invest. As for anywhere else, prospective investors should analyze local infrastructural quality and population trends where each investment property is located. It is also vital to consider average vacancy rates in targeted locale(s). Stick with high-growth areas like Southbank and St Kilda. The most reliable comparative analyses between capital cities encompasses 7 to 10 years of property market history. The property markets in Melbourne, Brisbane and Sydney continue to hold out high promise for future realty investments.


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