A new report from CoreLogic-Moody’s Analytics puts Melbourne as Australia’s most overpriced property market.
The Australia Home Index report from CoreLogic released this week says Melbourne’s houses are 23 per cent overvalued and have gone up in value way more in proportion to income and rental growth.
The overvaluing is set to stall though, with the report foreseeing a period of stagnation for Melbourne property prices for the next couple of years.
Head of research at CoreLogic, Tim Lawless, spoke to Domain, and said we won’t see Melbourne prices falling off a cliff, and a cooling off is what the doctor ordered after the recent property boom.
“Conditions in Melbourne are again expected to outperform Sydney this year, with values forecast to rise by 7.2 per cent in 2016, before slipping back to just 1.3 per cent growth in 2017,” he said.
Domain Group’s senior economist Andrew Wilson said trying to forecast the housing market in the long term was difficult in the current economic climate but thinks Melbourne is the most balanced and robust capital city in Australia.
“The era of boom and bust is behind us and we’ll move into a period of slower growth,” Mr Wilson told Domain.
“But there are dark clouds gathering, with changes to negative gearing on the horizon.”
“If these changes come to fruition then all bets are off.”
