Is Melbourne the next HOT topic?
Investing in property has proven to be a very safe and rewarding decision.
In most circumstances, it's impossible to go wrong. Since the Global Financial Crisis, a growing number of people are shying away from shares and realising the security of property investment. Many cities throughout Australia are displaying profitable investment potential but tracking down an area that is displaying significant capital growth is the key. A hot spot displays these characteristics, as well as a rapidly growing population. This will, in turn, assist in buyers benefiting from large returns. There is currently one city that incorporates all of these attributes and is attracting a greater amount of attention, when compared to all others. It is the city of Melbourne.
Findings from the Rismark International's Australian housing report show that Melbourne's property prices had grown by 5.4 per cent in the last quarter. In comparison, Sydney's prices rose by 3.8 and Adelaide only experienced a rise of 2.8 per cent. From the past year until February, Melbourne has experienced an incredible growth of 19.9 per cent.
According to Christopher Joye, the chief executive of Rismark, "Melbourne's booming market was on the back of strong population growth."
He further went on to say that, "Melbourne is probably the single most attractive destination for migrants coming into this country."
The current demand in Melbourne is so extreme that the prices that homes are being sold for at auction is well above the original reserve prices. At the higher end of the market, in excess of 80% of the 155 properties listed at around $1 million were sold.
Michael Szulc, from Cayzer Real Estate, commented by saying that, "A double-fronted brick home at 31 Langridge Street, Middle Park, sold for $1.82 million." This final sales figure turned out to be several hundred thousand dollars above the expected reserve price.
Paul Podbury of Buxton Carnegie stated that, "Given the numbers we're getting at our auctions and also the number of people putting their hands up, it would seem as though demand is still very, very strong."
Many first home buyers are struggling to get their foot in the door and wise home owners are also seeing their current home's potential and spending record amounts on renovations, adding even more value to their property. Evidence from The Australian Bureau of Statistics, shows that half a billion dollars was borrowed, in December, for renovations. This was an increase of $70 million within 12 months. More renovations occurred in Victoria than in the other states of Australia.
This proves that even the recent interest rates have done little to dampen the fire that is Melbourne's property market and there are no signs of it slowing down.
