The current situation with the Melbourne market reminds us that real estate investment requires a long-term view. For much of the past five years it’s been easy to buy and enjoy short-term capital growth but those opportunities no longer abound.
The locations highlighted in this report are ones that offer good long-term prospects because of their inherent local qualities. They’re places that have shown resilience amid the recent market correction and have good credentials for future growth.
The downward trend in the Melbourne market is starkly illustrated by our Winter 2019 survey of sales activity. There are no Rising markets, for the first time since our surveys began almost five years ago, and the number of Decline markets has risen to record levels. This survey reveals a further sharp drop in sales activity. In the past three surveys, the number of Decline markets has been 31, 73 and 113 – a pattern that demonstrates how much buyer demand his diminished.
Despite the general theme of downturn, there continue to be areas showing resistance with their pricing levels. Apartment markets in particular are holding up well and there are more suburbs with rising unit prices than those with prices down.
But Melbourne continues to show that, even in a city with a distinct overall trend, there are many diverse scenarios in play. Different sectors are producing different results, both with sales activity and with price outcomes.
Across the Melbourne metropolitan area we have analysed price trends in 435 house and unit markets and found that 44% have median prices higher than a year ago, while 56% have lower medians.
To discover the best places to buy in Melbourne at the moment, you need to read the new edition of Top 5 Melbourne Hotspots 2019.