On the eve of the Federal budget, Melbourne’s property spike may be slowing as figures show Melbourne property price growth has slowed this quarter.
Over the December quarter, Australian Bureau of Statistics figures show Melbourne property prices grew by 3.4 per cent. Over the March quarter they grew by 2.1 per cent.
Coinciding with this the average size of home loans has also fallen, from $323,600 in December to $314,200 in March.
Andrew Wilson from Australian Property Monitors told The Age he expects the market to continue to flatten due to affordability problems.
“Prices will now move in line with incomes growth because we’re not going to get any significant improvements to affordability through lower interest rates because they’re about as low as they can go,” he said.
Somewhat surprisingly, first home-buyers figures have bounced back a little over the March quarter, although numbers are still down on the same time last year.
“In some areas, we’re getting feedback that the first home-buyers have pulled back because of the increase in prices. But on the western side of town, that demand is still very strong and Werribee, for example, is still showing some surprising prices,” Mr Wilson said.
Head of ANZ property research Paul Braddick said there was room for further growth in property prices while interest rates were expected to remain steady until early next year, although the economic outlook for the state economy may have an effect.
“The labour market in Victoria hasn’t been as strong as it has been in some of the other states, so that could just be a background issue that is starting to impact confidence here compared to what we are seeing in some of the other cities,” he said.