Victoria’s house prices will continue their upward trend for the remaining six months of 2010, despite the market softening in the first half of the year, as the number of buyers coming into the market reduces.
Melbourne will lead the Victorian property market over the coming period with many developers focusing on the Melbourne metropolitan market for land acquisitions.
As predicted in our January 2010 Property Outlook, house prices in Victoria increased by an average of between 5-10 per cent, and growth is still anticipated for the third and fourth quarters of this year, although this will slow marginally to between 1-5 per cent.
There are some pockets throughout the State that appear to be exempt from the influences of the lack of first home buyers, higher interest rates and secure employment.
On the other hand, other areas are starting to feel the impact, where we are starting to see an increase in foreclosures by financial institutions.
Housing affordability in Victoria has worsened by 10 per cent in Melbourne and 16 per cent in regional Victoria, based on the March quarter figures, compared to 4 per cent nationally.
However, on the upside, more than 50 per cent of all jobs created in Australia in the past 12 months were reportedly in Victoria. The state is also attracting more than its fair share of the population surge, with two-thirds of skilled migrants reported buying a house within the first 18 months of moving here.
Developers will continue to eye off Victoria’s property market prospects with the state government widening Melbourne’s urban growth boundaries.
Provided interest rates remain stable, potential buyers should see now is a good time to purchase and invest in real estate, regardless of whether they are a want-to-be owner/occupier or investor.
According to our survey, 80 per cent of respondents anticipate investor activity to increase, while 7 per cent expect it to decrease and the remaining 13 per cent expect no change. Of those anticipating an increase, around 60 per cent predict increases of up to 10 per cent and around 23 per cent predict increases of between 10-20 per cent, which is huge.
Interest rates are expected to continue to increase by all Victorian respondents, with predicted increases varying between 0.5 per cent and 2 per cent.
Sales volumes for the next 12 months are anticipated to increase by 60 per cent of respondents, on the back of all respondents having experienced an increase over the last 12 months.
