News

Melbourne property downturn could get worse

23 January 2019

The Melbourne property market downturn could get worse this year after record falls in the later part of 2018.

Melbourne home prices fell 3.2 per cent in the final quarter of last year contributing to a 7 per cent annual fall according to CoreLogic figures.

CoreLogic’s Cameron Kusher said the 3.2 per cent quarterly drop was a record for our city, and reduced the median house price to $645,123.

Mr Kusher told News.com that prices in Melbourne had started to fall quicker than those in Sydney.

“Melbourne prices continued to grow at a consistent rate for much of the past decade, at a time when there wasn’t much growth in other capitals,” he said.

“Affordability is now very stretched.”

“Someone on a median income will now have to spend 17 times their income to buy a house.”

“Banks are being very cautious about high debt-to-income levels, so financing has become challenging,” he told News.com.

In the face of the property downturn, it has been the more affordable parts that have held their price better, with regional towns and cities doing particularly well.

The Latrobe-Gippsland area, Ballarat, Geelong and Bendigo have all been standouts recording solid price growth.

Highlighting this are figures that show the lower price quartile of Melbourne’s property market finished last year up 0.5 per cent as opposed to the top quartile, which dropped 11.2 per cent.

Incentives for first-home buyers, such as stamp duty concessions, have helped to stabilize the bottom end of the market.

In a further boost to lower end property hunters, apartment prices in desirable Melbourne suburbs such as Windsor and Fitzroy have also fallen and have put them within reach of entry-level property buyers.

Latest

Broker group Finsure says if some of the recommendations from the Hayne Royal Commission are brought in it will set the Australian home loan market back 30 years because it will give the banks more power.

Read more

Property investors have been popping up back out of the woodwork searching for super-cheap bargains before a possible Labor election win and subsequent negative gearing changes.

Read more

Business conditions have remained flat since falling sharply in December according to the recent NAB survey and it has the bank predicting interest rates to be on hold until 2020.

Read more

Hobart and the Gold Coast’s property markets are starting to benefit from the price downturn in Melbourne and Sydney.

Read more