Melbourne Land Prices Increasing
Land prices in Melbourne are set to continue to escalate due to a combination of factors, creating even more of frenzy as buyers struggle to attain property in this sought after city. Even with the recent interest rate rises, buyers appear to be undeterred when it comes to purchasing property.
A large contributor is the rapid decline of property and land availability - factors directly attributed to the unprecedented growth in population coming from both overseas and interstate. This has created high demand for property in Melbourne and the prices have nowhere to go but up.
JPP Buyer Advocates, Catherine Cashmore, said that, "Interest rate rises were going to have little effect on a housing market where the real problem was a lack of stock for the booming population."
Chairman of Noel Jones Group, Adrian Jones, also believed the market was as strong as ever, even after the latest interest rate increase.
The property market hit $1 billion for the first time recently, reflecting that the market in Melbourne was still surging ahead with confidence as many more Australians and international investors show interest in purchasing residential property.
Findings from the Real Estate Institute of Victoria show that the average price of a Melbourne house was $540,500 at the end of 2009. The recorded increase from the previous quarter was 15%. It has been predicted by Tim Fletcher of Fletchers Real Estate that, "It was possible that the median price of a home in Melbourne would hit $650,000 in a few months." Many suburbs in Melbourne are experiencing record growth in property value. One example is Burwood, which recorded a 23% rise.
The president of the Real Estate Institute of Australia, David Airey, commented that, "Rises purely come out of people wanting to live in a particular suburb at the same time. As a consequence, prices rise, and that is happening in every city in the country - but Melbourne has gone absolutely crazy in some parts."
Chris Freeman, the Managing Director of MLG Realty, also backed this by stating that, "As long as returns are evident for investors, which they certainly appear to be at the moment, prices look to only be heading one way. And with finance approvals for investors up almost 30 per cent over the year in NSW, it looks sure to continue."
The vacancy rates, of the Melbourne rental market, are at the lowest point that they have been in 25 years. The situation is expected to worsen as the dwelling demand overwhelms the available supply and new developments. The current ratio figure within Victoria is only 1.5 property approvals to a 2.3 person increment in population. This trend, in effect, is creating greater competition for housing and pushing values to record heights.
