It’s a very interesting time to observe the property market in Victoria. The Covid-19 pandemic and record low interest rates has led to increased activity in the property market.
Firstly, on a national level, house prices in particular have reached a record high during the first quarter of the year, which led to an average house cost of $899,509 across the country. It is also clear that buyer demand has increased strongly across the country over the past year.
Prices
In recent months, housing prices have risen in Melbourne at a faster rate than regional Victoria, which is worth taking note of, as this change has not occurred for the last 12 months or more!
In fact, house prices are now up by 4.8% to an average (median) of $974,397, which is an increase of just over 7%.
It’s worth noting that Melbourne has been the only capital city in recent months to record a new price high for units. Units have displayed a 2.2 per cent rise during the March quarter to an average of $568,793 per unit.
Demand
On a state level, Victoria has had an increase in demand for units over houses, as we observe a 46.6% increase in units, which is almost twice the increase for houses. Furthermore, buyer demand has increased country-wide but most noticeably in Victoria as well as the ACT. However, it is important to note that there are exceptions to the increase percentages in units across Victoria. In fact, CBD & Southbank high-rise units have generally not seen increases.
Victoria has seen an increase of approximately 35%, which is a very positive and healthy increase for the overall property market in the state. Looking at the timeline of this increase, it has noticeably occurred in the second half of 2020 but has continued to rise through 2021 so far. Due to this increase continuation, it is likely that demand will remain at elevated levels over the coming months as interest in the Victoria property market remains high.
However, it is important to note that as more stock continues to enter the market, this will lead to more buyers, and in turn, a possible plateau or decline in demand in Victoria’s property market.
Factors that are contributing to changes in demand:
- Record low interest rates
- Federal housing incentives & schemes
- State housing incentives & schemes
Meadows Property Group is a real estate agency located in South Yarra, Melbourne.