Right now economists and journalists are seriously misreading property markets.
Nothing new there, of course, but now more than ever the media channels are awash with misinformation and bad analysis.
And the market that is being misinterpreted the most is Melbourne.
According to CoreLogic data, Melbourne house prices fell in March, though not by much.
Media tends to accept CoreLogic figures as fact but other reputable information sources have different figures.
While CoreLogic says Melbourne house prices dropped 0.2% in March, SQM Research says Melbourne house prices rose 1.3% in the same period.
Who’s right? Potentially neither of them but I would lean more towards the SQM Research figure, because it correlates with all the information we have on the current market in Melbourne.
I expect Melbourne to have a strong year in real estate in 2022.
Last year, Melbourne did well, despite being the most locked-down city in the world.
Despite all the restrictions, Melbourne produced strong price growth, particularly for houses.
It wasn’t as strong as other major cities, but it was remarkably good in the circumstances.
So, how will the Melbourne market perform in 2022, free of lockdowns and with major new factors in play, including the opening of international borders.
Borders opening means that overseas migrants and foreign students can return – and this, I believe, will have a big impact on the Melbourne market in the near future.
Our analysis of sales activity data, which we do every quarter, shows that Melbourne surged out lockdown when the last of the big restrictions ended in October 2021.
There has been a major increase in sales activity since then – and that inevitably leads to price growth.
We have also seen a sharp reduction in vacancy rates in Melbourne. The latest figures suggest the overall vacancy rate for Melbourne is now around 1.5%, the lowest for many years.
We are already seeing evidence that inner-city rentals are rising again, having been suppressed by high vacancies over the past two years.
Restrictions have ended, sales activity has risen, vacancies have fallen, rents are rising, international borders are open and there’s a big infrastructure spend in the mix.
Our new edition of the Top 5 Melbourne Hotspots report features the 5 locations that are poised for further growth.