Melbourne property market outlook for 2020
Melbourne Auction Results for Saturday 14 March 2020
There were 1091 residential property auctions held in Melbourne on Saturday 14 March 2020. 68 per cent produced a sale, up from 48% last year, for a median sale price of $900,000 in preliminary results reported by Domain.
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Melbourne Auction Results, Saturday 7 March 2020
There were 347 residential property auctions held in Melbourne on Saturday 7 March 2020, the Labour Day long weekend.
69 per cent produced a sale, up from 49% on the same weekend last year, for a median sale price of $802,000 in preliminary results reported by Domain.
Auctioneers at 23 Wingrove St, Cheltenham handed out a 24 pack of three-ply Kleenex toilet paper to the first bidders, instead of the traditional bottle of bubbly. The family home on 573sq m block sold for $950,000.
Read more trending financial news at InfoChoice.
Melbourne Property Market Update, 5 March 2020
The Reserve Bank cut interest rates this week to 0.50% with all big four banks passing on the cut quickly.
RBA governor Dr Philip Lowe said coronavirus is having a significant effect on education and travel.
“The uncertainty that it is creating is also likely to affect domestic spending,: said Dr Lowe.
“As a result, GDP growth in the March quarter is likely to be noticeably weaker than earlier expected.”
Dr Lowe noted “further signs of a pick-up in established housing markets” and said home prices are “rising in most markets, in some cases quite strongly.”
“Mortgage loan commitments have also picked up, although demand for credit by investors remains subdued.”
“Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.”
Melbourne Auction results show booming summer market
There was a massive number of auctions held in Melbourne on Saturday, indicating a strong demand for Melbourne homes. Despite the large numbers of properties going to auction, clearance rates were up on the numbers from last year. Melbourne property process are recovering.
There were 1380 residential property auctions held in Melbourne on Saturday 29 February 2020 with 73% producing a sale, up from 55% on the same weekend last year. The median price for properties sold was $876,000, reported Domain in preliminary results.
Tenants get more rights under new Victorian laws
From 1 March 2020, tenants are allowed under Victorian law to keep a pet in their rental property, with written consent from their landlord or rental provider.
The new rules around pets are part of a package of 130 new rental reforms that will be introduced by 1 July 2020.
A tenant requesting approval for a pet will need to complete a consent form from the Consumer Affairs Victoria website.
If a landlord wants to refuse the request they seek an order from the Victorian Civil and Administrative tribunal to refuse the pet.
The Victorian Minister for Consumer Affairs, Gaming and Liquor Regulation Marlene Kairouz said the new laws form part of the biggest change to the Residential Tenancies Act since it was implemented more than two decades ago.
Melbourne is Australia’s second city in terms of population and Australia’s second most expensive capital city property market, after Sydney. Anyone planning to buy there may be wondering what the Melbourne property market is shaping up to look like in 2020.
Melbourne property downturn is easing
Property prices across the nation were looking somewhat downcast in 2019, but the rate of fall seems to be slowing and there’s some hope for an upturn.
Two things in 2019 have sowed the seeds of this growth – the Reserve Bank cutting interest rates and lenders cutting home loan eligibility rules, like buffer rates.
Q3 2019 data from CoreLogic and Moody’s predicts Melbourne home prices growing by 0.2 per cent, after seeing no positive growth since the middle of 2017.
Why Melbourne looks good for 2020: reasons to be optimistic
Lots of different factors are coming into play for Melbourne property prices this year, helping buyers and sellers alike to have better morale.
The lower interest rates – down to 2.44% pa fixed for three years from one home loan provider on InfoChoice – means that borrowing is much cheaper.
There are also more relaxed credit lending restrictions. The Australian Prudential Regulation Authority (APRA) has said that banks can set their own serviceability criteria and so now borrowers only need to be able to service their loans if the interest rates rise by 2.5 per cent.
The election last year means that there’s more certainty for markets, as well as individual investors and consumers.
The start of the First Home Deposit Scheme might bring some life into the market now it’s officially started.
Eligible first–timers will get a guarantee up to 15 per cent of the purchase price of their chosen property if they’ve got a five per cent deposit.
This should bring some added attention to those hot Melbourne suburbs, like Eltham (pictured) and Point Cook, that are proving popular with younger buyers. They’re also considered by some commentators to be among the best Melbourne suburbs for property investors, and with the interest rates so low, these areas could see lots of action in 2020.
A word from the experts
Property market analysts are also feeling quite optimistic, with many in agreement about 2020 being a buoyant year for Melbourne house prices and movement in the city in general.
ANZ Bank names Melbourne as best–performing capital city
ANZ Bank experts foresee a 4.3 per cent increase in house prices for Victoria’s capital city. This is contrasted against 2019’s fall of 2.1 per cent, which is a sharp turnaround. The bank believes that Melbourne will do better than the other capital cities and that this growth will be backed up by population increases and the resultant housing supply shortage.
Melbourne property outlook 2020: Cautiously optimistic
Domain is a little more cautious than ANZ, expecting Melbourne’s house price growth to grow by between one and three per cent and its unit prices to increase by up to two per cent throughout 2020.