Melbourne Record Property Growth
Houses in Melbourne have displayed record growth, overtaking the other major capital cities within the nation. The housing market of Melbourne appears to have exploded, charging ahead with an increase of 18.5 per cent. Property prices now stand at the unprecedented amount of over half a million, on average, which is a significant jump from the previous quarter.
As well as the astounding property and unit growth, Melbourne has been named the number one capital city, when it comes to auctions. Melbourne has demonstrated an 80% clearance rate.
The suburb of Burwood led the way and saw a dramatic rise, during the December quarter of 23.1 per cent from $658,000 to $810,000. This can be broken down into an incredible growth of $1652 per day. Numerous other suburbs in Melbourne followed closely behind with Ashburn, Mt Evelyn, Lilydale and Ringwood demonstrating a surge exceeding 15 per cent. The daily growth of Ringwood can be calculated to reflect an increase of around $790 a day.
The rise appears to be due to a combination of various factors. Within the suburb of Burwood, Matt Lockyer, of Cooper Newman Real Estate, said Chinese investors were fuelling Burwood's record growth, with prices particularly hot on homes close to Deakin University. He further went on to say that, "as soon as something comes up it is a frenzy. Burwood has surprised everyone. It is (selling) like hotcakes. Eighty per cent of our clients were Chinese buyers." Burwood's fast moving market has seen properties sell within days, at higher than their asking price because there are more buyers than available homes.
REIV chief executive officer, Enzo Raimondo, commented that this growth is, "the combination of better than expected economic conditions and strong population growth." The result is, "an unprecedented level of pressure on housing costs in Melbourne," he said.
"Melbourne's population growth of 1700 newcomers per week, combined with a slower housing construction movement and market confidence, had placed pressure on the price to rise," Raimondo continued.
Another contributing factor is the resurgence of the level of sales amongst higher end properties, which has in effect, assisted in bumping up nationwide median gain to record highs. Buyers' advocate David Morrell stated that, "top-end sales had been slow since the property market downturn last year, but demand from the uber rich had now resurged with a vengeance. The huge numbers are just unprecedented."
An example of this is the sale of the Hawthorne mansion for Clinton Casey, the former Tigers president. The mansion is believed to have been sold for a staggering $21 million or more. Founder of Jayco Caravans, Gerry Ryan, similarly spent big on a single-storey Toorak house at 13 Albany Road, with the owners happily pocketing $18.5 million
APM economist, Matthew Bell, commented that, "Activity in the more expensive suburbs has been driven by the surprisingly resilient jobs market experienced in late 2009 and a strongly rising share market."
