Economic and political stability are helping to support Melbourne in the slowdown, and it may get through without a scratch
Melbourne and Sydney are being highlighted as having the weakest property market conditions in Australia by CoreLogic’s Hedonic Home Index for October 2018, but Melbourne may come out better than its peer at the end of the slowdown.
Melbourne’s property prices were down 4.7% over the 12 months to October 2018 compared to Sydney’s 7.4% drop. And beyond the metro, the other regions of Victoria are enjoying the spillover effect as demand flows out of Melbourne to more affordable areas.
“It’s almost impossible to escape headlines declaring prices falling in housing markets in major Australian capital cities, but all indicators point to Melbourne as a prime investment location supported by strong population growth, stable political leadership and a high level of government investment in infrastructure,” says James Nihill, managing director at Patrick Leo.
The city’s high-performing economy has enabled it to weather the current national property market storm, and the median house price even increased by 5%. Moreover, the state’s remarkable population growth continues to pay off, causing Victoria to outrank NSW economically for the first time.
“Melbourne is on the verge of overtaking Sydney as the nation’s largest city and remains a safe bet for investors in terms of securing tenants and both rental and capital growth,” Nihill concludes.
Geelong maintains noteworthy run
Outside of Melbourne, the region of Geelong continues to capture interest given its affordability and the convenience of travel to the Melbourne CBD.
“The V/Line country train takes just 45 minutes to the Melbourne CBD from the suburb of Corio – this commute is much quicker than that from many Melbourne suburbs,” says Research Property Real Estate’s property research and acquisitions coordinator, Henry Fields.
“A typical young Melbournian could buy a $600,000 onebedroom unit in Bentleigh East and take a train for 35 minutes to the city – or he/she could buy a three-bedroom house on a large block in Corio just 45 minutes from the city and by the beach.”
Initiatives to improve Geelong’s infrastructure, such as the rail line duplication from South Geelong to Waurn Ponds, will only add further to the area’s appeal.
“Geelong is the fifth-biggest regional city in the nation. Its importance as a real estate market should not be underestimated,” Fields says.
VIEWBANK: Apartments are the top performers
Just over 10km northeast of Melbourne’s CBD, Viewbank is a beautiful suburb bordered by the Yarra River and the Plenty River. Units are the winners of the property market. Values rose consistently over the five years to October 2018, taking the median price to almost $650,000. Houses fell behind during this period, with values declining by nearly 10% to a median of $931,482. Viewbank has several schools, including Viewbank Primary School and Viewbank College. The suburb also has a number of parks, such as Viewbank Reserve, Castleton Park and Price Park. Banyule Flats contains one of the largest intact wetlands in inner Melbourne. The suburb’s commercial strip is on Martins Lane.
Amenities: Viewbank has many schools and parks, making it perfect for a family lifestyle
Growth: The unit market is performing very well, at over 6% growth in the year to October 2018