Melbourne Property Market Update
First quarter 2021 Houses and apartments in Melbourne’s inner-city suburbs are listed for fewer days and are not being discounted by as much as they were a year ago, new data shows. After months of being locked down because of the coronavirus pandemic, the property market is now showing the early signs of recovery, though prices remain flat across the city. For buyers, flatter prices and fewer discounts mean they do not have to rush to the market to buy, and have more time to look for the preferred property.
The inner-city Melbourne real estate market is seeing greater risk in 2021, with an increase in listing stock weighing on a recovery in values. Institutional interventions will continue to shape the profile of property buyers, particularly as HomeBuilder is extended at a reduced rate into Q1 2021, and regulators monitor prudential lending standards. Overall, the housing market outlook for 2021 is positive, given highly accommodative monetary and fiscal policy, signs of an economic recovery and many first home buyer incentives remaining in place through to early next year.
The improvement in some of the inner-city regions are yet to reach Melbourne’s outer fringe where days on market, discounts and the number of discounts on all listings rose, data shows. After months of being locked down because of the coronavirus pandemic, the property market is now showing the early signs of recovery in 2021, though prices remain flat across the city.
For buyers, flatter prices and fewer discounts mean they do not have to rush to the market to buy, and have more time to look for the perfect property.
Vendors on the other hand, as always need to be mindful of how they are pricing their properties for sale to meet buyer expectations and successfully sell.
Melbourne’s property investment market is reasonably balanced at present with activity across most price brackets, regions and buyer types.
Melbourne Property Market overview 2021
Despite initial fears of a property price crash, Australia’s housing market has stayed in robust shape, with signs it’s set to grow even stronger in 2021, especially in Melbourne. The latest report from property development platform Capital city markets have rebounded across the board since the easing of COVID-19 restrictions and the standout player has been Melbourne. Melbourne’s strong recovery is an indication that the pandemic-induced dip in home buyer and seller activity was a pause rather than a cyclical or economic downturn event.
Besides falling rent values and record high vacancies in parts of the market, particularly inner city apartments in Melbourne and Sydney, the main issue is that it’s still challenging for investors to be approved for a loan. Property investors are still pushing against what is a culture of negative attitudes from lenders to investors.
With owner occupier lending booming at the moment at record levels, banks aren’t overly fussed about still having restrictive lending for investors since the drop-off in investors isn’t creating a real negative on their balance sheet.
But in 2021, with property prices expected to keep rising, the appeal of capital growth may draw more investors back into the market.
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