Victoria's property market is reaching new heights after the pandemic.
But if you're looking at the Melbourne market and wondering what comes next, you're not alone. One location that everyone is watching closely is the inner city, which could see the light at the end of the lockdown tunnel in 2022 and beyond. So, we asked the experts what’s in store for urban neighbourhoods.
Opportunity in the city market
With lockdowns finally a thing of the past, Melburnians are breathing a collective sigh of relief and those invested in its real estate market are no exception. For anybody searching for property, it’s well and truly a buyers’ market, according to the experts.
"There will be less buyers active in Melbourne's CBD apartment market than there were pre-COVID for the near future. But we're starting to see international borders reopen and people are trickling back,” according to Anne Flaherty, REA Group economist.
“So, from that point of view, I would say now it's actually quite an opportune time for those who are considering buying or renting in the city to lock in a deal.”
Apartments
Inner-city Melbourne has not seen prices skyrocket in 2021. And, in good news for buyers, unit and apartment prices in the CBD will continue to remain affordable in the near future with plenty of options on the market, according to Flaherty.
What's more, the Victorian Government is backing an attractive offer for purchasers of new residential property before June 30, 2022: a 50% stamp duty concession, or 100% stamp duty concession if the property has been on the market for more than 12 months.
When it comes to individual city suburbs, there are a several standouts for owner-occupiers.
Melbourne CBD offers an excellent opportunity for those who want a city lifestyle but are on a budget, with the median sale price of units remaining at $480,000 over the past 12 months and rents sitting at $350 per week, Flaherty explains
However, a stand out location for apartment buyers will be prime real estate on the river. There's plenty of mid-range stock that is perfect for first home buyers, as well as luxury buys too, which will appeal to home upgraders.
"Fishermans Bend is an interesting one. It's been a bit slow getting underway, but I think definitely over the mid-to-long term, we're going to see a lot more activation and development in that area,” says Flaherty.
“This is because we’re seeing fewer and fewer available development sites within the City of Melbourne, which is what’s going to drive the Fishermans Bend precinct.”
One interesting new trend that is likely to be seen in the post-pandemic market is more Melburnians looking for apartments once the borders open, according to Nelson Alexander partner James Labiris.
“Apartments will be a very interesting one,” he says.
“Given what’s happened with COVID and people not being able to travel for the last few years, I think we will see a lot of people downsizing their family homes and buying a Melbourne base, usually closer to the CBD. This is because a lot of people deferred retiring, and have been planning a trip to Europe, and other overseas destinations. So, I think apartments will definitely hold value, if not rise.”
Houses
REA data shows there has been a shift in demand toward bigger three and four-bedroom dwellings, which is likely here to stay, meaning demand for inner-city housing is not only continuing, but will likely rise.
"Houses will substantially outperform units in the inner-city markets, due to the scarcity of houses in those areas,” says Flaherty.
Areas of particular note include Carlton and West Melbourne.
Both are within walking distance of the CBD and popular among university students.
"Carlton has had a really difficult 18 months because there's a high number of international students that call this location home who left during the pandemic,” says Flaherty.
“But Carlton remains one of the most desirable suburbs in Melbourne and should have a fast recovery."
Currently, the median price of a house in Carlton is $1.44 million, up 17% year-on-year, with rising prices a trend Flaherty sees continuing. Apartments are doing even better – the median price for units in the suburb is $515,000, up 51% from the previous year.
Investors are also likely to be circling due to these suburbs being closely located to Melbourne University, the RMIT city campus, along with retail and restaurants on Lygon.
She adds that the competition will likely be more intense for larger free-standing properties, and less so for high-density developments.
Original post: https://www.realestate.com.au/news/2022-what-to-expect-from-the-melbourne-property-market/