Melbourne values continue to grow - can it last?
Melbourne continues to grow more valuable, as another month ticks by with CoreLogic RP Data recording a strong median value increase for the Victorian capital. However, while there has been growth, it has not been as significant as this time last year – could this be the sign that the real estate market is turning in favour of buyers?
A rising trend
Can this kind of growth last? Or even should it?
Over the month of July, Melbourne median values grew by 1.1 per cent, cracking a new high of $585,000 and a year-on-year value increase of 7.5 per cent. In comparison to the other cities across Australia, this is a huge result, beating out every other city except for Sydney – and even then, only losing out by a few tenths of a percentage.
The increased values are a sign of continuing strong demand for property in Melbourne. Whilst the average time to sell has stayed steady at 35 days in June, according to the Real Estate Institute of Victoria. If you decided to sell your home in Melbourne today, you could have the cash in your account the next month.
However, the strong growth has been offset by the constant question: Can this kind of growth last? Or even should it?
Out to sea?
Melbourne real estate might be a hot ticket at the moment, but the growing values have made it difficult for younger Australians to make their first purchase – something that may have resulted in a falling proportion of first home buyers trying to find financing, according to data from the Australian Bureau of Statistics.
It is a difficult question to answer, but a level of balance is certainly possible; and it looks like that is what we are seeing. Values might still be rising, but the moderation in growth compared to last year could be good news for everyone: the change has not been so sudden as to crash investor interest, while still significant enough to give first home buyers a look in. As CoreLogic Research Analyst Tim Lawless explains:
“The recent moderation in the rate of capital gains should be viewed as a positive sign that growth in dwelling values may be returning to more sustainable levels.”
Whether you’re an investor or a first home buyer, it looks like it’s a good time to be a property owner in Melbourne. If you’re interested in finding out more about the property market in the Victorian capital, make sure you get in touch with the team at Nelson Alexander.