As the over-exaggerated reports threatening the collapse of the Melbourne property market continue to roll in, it can be a bit of a head-scratcher trying to work out how the market is really holding up, and even more of a challenge to get a clear idea of what we can expect from the future ahead!
Thankfully, a new report has been released to provide an accurate and unbiased look at the current situation and offers an evidence-based outlook on what we can expect from the years to come.
Produced by BIS Oxford Economics for QBE Lenders’ Mortgage Insurance, the QBE Australian Housing Outlook 2018-2021 report provides a deep analysis of Australia’s residential housing market and looks at all of the factors that contribute to market trends.
According to the report, property prices in Melbourne have experienced a surge of 65% in the last five years and the median house price as of June was $870,000. While the market is undoubtedly taking a breather – there is certainly no sign of a crash in sight.
Here are some of the report’s key predictions on what’s in store for the Melbourne property market.
Continued population growth
Over the last few years, Melbourne’s population has continued to climb with an influx of new arrivals from interstate and overseas. In the last year alone, the population grew a notable 2.3%, and experts predict that Melbourne may overtake Sydney as the most densely populated city in the country by 2031.
More new dwellings to meet demand
In order to meet the demand of our growing population, it’s likely we’ll continue to see a number of new apartment buildings popping up as well as new housing estates in the city’s outer suburbs – although perhaps not quite at the same rate as we have seen in recent years.
Property prices to experience modest growth
While it’s unlikely we’ll see the same level of growth for quite some time, property prices are expected to remain strong and experience a modest growth of 6% over the next three years.
Small pockets of oversupply
On the whole, the demand is predicted to remain quite strong, but with the vast number of new dwellings on their way, it’s likely that we’ll soon see some small pockets of oversupply – most likely in the form of vacant apartments and units.
Unit prices predicted to fall
With the looming risk of oversupply and a majority of Melbournian’s preferring to buy houses rather than units, the report forecasts that the price of units will fall by 2% in the next three years.
Overall, it looks like we’re in for a strong, steady few years, which is great news for all. For further support in navigating the Melbourne property market and purchasing your next home, call 03 9600 2124 and talk to the team at Rising Tide Financial Services today.