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Melbourne property prices set to keep rising in 2020 unless affordability derails momentum

09 January 2020

It’s the start of a new year and a new decade and hopefully everyone got through the festive season in good health.

It was a strong finish to 2019 regarding the property market, does 2020 hold more of the same?

Prices are certainly tipped to keep rising early this year with high clearance rates expected unless a new housing affordability situation arises due to low wage growth and low economic growth.

According to Jason Andrew from Ray White up in NSW, it’s Sydney’s property market that is leading the charge with Melbourne not far behind.

“We’re seeing phenomenal activity right across Sydney but even into the summer…the results are flowing on quite incredibly,” Mr Andrew told Domain.

“Sydney and Melbourne prices haven’t rebounded back to previous heights and I can see them rolling into next year with people confident they aren’t over-paying.”

“It might continue that momentum, then we might be in for a fabulous 2020…or it might just be an okay winter and plateau towards the end of the year.”

AMP Capital’s Shane Oliver says he can indeed see housing affordability again put the brakes on house price growth in the second half of 2020.

“Melbourne could hit record highs in February or March and Sydney could be in May,” he told Domain.

“They’ll continue to grow through the year because we’ll be in the same environment of low or even lower interest rates and we’re passing the peaks in units supply.”

“We may even see a renewed tightening by APRA if credit growth continues to pick up.”

Auctioneer Arch Staver is from Nelson Alexander and thinks Melbourne’s property market will return to where it was.

“The banking inquiry, the reluctance of the banks to lend, all of that disrupted the marketplace,” he told Domain.

“Prior to that it was going along rather nicely…it’ll be reinstated to where it was.”

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