Melbourne Property Forecast
Residential prices in Melbourne are set to continue increasing, according to the BIS Shrapnel three-year forecast. BIS Shrapnel is an independent economic forecaster and property analyst company. They are often looked to for their insights into the future conditions of the real estate, nationwide
The estimated amount for the growth was 19% percent, which included inflation. Sydney and Adelaide were also predicted to have a similar growth as Melbourne. BIS Shrapnel came to this conclusion due to the rush of first home buyers scrambling to use their first home owners grant while they still could.
Mr Zigomanis of BIS Shrapnel said, "We're expecting that increased first home buyers activity to lead through to stronger upgrading demand for people upgrading to their next property." He also added that once the first home owners grant expires and first home buyers drop back out of the market there will be enough activity in the market for it to become self-sustaining.
Further findings for Melbourne's property market from BIS Shrapnel stated that the median home price in June 2009 was around $425,000. This figure would be expected to increase. A lot of market activity was predicted to be amongst those who were looking to upgrade their property.
"The weak economic environment will continue to be a dampening factor on price growth in the Melbourne market during 2009/10," says Zigomanis. "A rising deficiency of dwellings will maintain upward pressure on rents, while the reductions in interest rates have boosted affordability in Melbourne to its best level since 1999.
"This is likely to encourage demand as economic growth begins to strengthen through 2010. Over the 2009 to 2012 period, we are forecasting Melbourne's median house price will rise by a total of 19 percent, which is nine percent growth in real terms."
However, others are sceptical of such a rise occurring due to the rising level of unemployment. Many predict that the market will remain stagnant from the hesitation of citizens to jump into the market when there was so much uncertainty regarding stable employment. According to Mr Zigormanis' outlook, unemployment, affecting Australia, will peak between 7 and 8% mid next year. The government, however, seems to think that this will not be the case until mid 2011. This will, in effect, leave approximately one million Australians without work.
Regarding employment affecting growth, Mr Zigormanis added the impact on house prices would be "more so from a confidence perspective."
He elaborated by saying, "Those people who have the means to buy property, and still have a job to buy property, they may be concerned about their employment outlook."
From the findings, it can be concluded that the housing situation in Melbourne is good for buyers. It has the largest and most affordable new home market compared to the other major cities throughout the nation. Real estate in Melbourne is more affordable than those located in other major cities nationwide.
