As most pundits are probably aware, Melbourne’s house prices are predicted to slow again next year, with the median house price growth expected to be around half of what it was this year.
Our city’s median price grew around 10 per cent in 2016 and that should weaken to around 5 per cent next year.
There’s more conjecture over the inner city areas and their current oversupply of apartments, some punters say prices in that market will fall and Domain Group’s state of the market report says they will rise slightly at around 3 per cent.
Domain Group’s chief economist Andrew Wilson gave his thoughts on next year’s conditions.
“It’s going to be a much slower year for the market, and we’re coming into realisation this economy is now generally struggling,” he told Domain.
HSBC chief economist Paul Bloxham was slightly more pessimistic than Mr Wilson giving his thoughts on the same forum.
Mr Bloxham said he expects house prices to rise by just two to four percent with apartment prices falling somewhere below 5 per cent.
He also noted the falling value of the Chinese currency against the dollar would decrease interest in Australian property from Chinese buyers next year.
Shane Oliver from AMP Capital told Domain rising bank interest rates next year combined with apartment oversupply would soften the market in 2017.
“Melbourne prices have had huge run over for the last few years…you get the impression that it’s suffering a bit of exhaustion,” he said.
“If you cut interest rates, there won’t be that pull of pent-up buyers that there was a few years ago.”