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.