Driven by the gradual easing of the pandemic restrictions leading into 2022, Melbourne has seen a large surge in property listings and auction volumes due to the overall increase in confidence in the property market.
However, growth in the past month has slowed down a bit, due to the abrupt upsurge in new listings and affordability pressures weighing down the city’s market. However the property price boom has not finished yet, with property values in east coastal cities such as Brisbane and Melbourne continuing to rise at a rate of 1 per cent per month.
Melbourne’s median property price has risen a staggering 16.2 per cent in the past year, with an estimated value of approximately $788,484 leading into the 2022 year.
Stock levels in Melbourne are presently only 7.9% higher than the five-year average, according to CoreLogic. This has come following a time in which there was a scarcity of residences for sale in the Victorian capital.
It was also found that when looking at rental properties, it was found that Melbourne unit rents have risen at a slightly faster rate than house rents, being the only city in Australia which has done so in recent times.
Further forecasts predict that inflation will have a large impact on future housing interest rates due to the central banks modifying the cash rate in order to meet the increased inflation target, thus inherently affecting the interest rate which lenders determine the interest rates for home loans.
Leading into 2022, capital city dwelling is set to rise significantly during the first and second quarter, until it flattens out during the June quarter which is mainly due to contraction in the more populated property markets such as Sydney and Melbourne.
Pent up demand
High consumer confidence
Improved immigration numbers
Property Market Overview 2022
Remember, that when you select a unit as an investment, succumbing to the lure of tax savings is a fundamental mistake for investors. You do not attain financial independence through saving tax – you gain financial independence through the ongoing capital growth of your assets. So, get the location and returns right and the capital growth should follow.
The Annual Return Index measures the capital growth of an investment property together with net rental income, to give an accurate comparison between Australia’s cities. Melbourne’s investment property market is making another steady start in 2022 and seems set to continue to do so in the long term. Property investors should be very selective in terms of suburbs they consider for investment property. As always, look at the level of infrastructure and population growth of any property location and market in Melbourne including vacancy rates. Comparisons between the Capital cities are best considered over 7 to 10 year periods with Melbourne, Sydney and Brisbane continuing to be good options for property investment in the future.