According to the Australian Bureau of Statistics, Melbourne is the fastest growing city in the country, with a current population of 4.64 million. The prediction is that Melbourne will soon overtake Sydney as the most populated city in Australia.
Historically, Australian is renowned for the chronic housing shortage in major cities. This shortage, pared with the increasing demand for housing, invariably drives rental yield up, and makes way for strong capital growth. Corelogic data indicates that Melbourne property values have increased 15.9 percent over a 12-month period to March 2017.
The Melbourne property market looks to be a relatively safe long-term investment option.
The key to capitalizing on the Melbourne property market is to choose a suburb with lots of potential. That is, in the early phases of gentrification. Some key identifiers are new cafes, restaurants or bars opening up, good schools, proximity to the city, and increasing income. Ideally, the property should need a renovation, as you can cultivate your own capital growth through the amount of effort you put into a renovation.
Director of Property Managers Melb Elazabeth Oravec, say “suburbs within 15km to the north of the CBD remain popular and show good capital growth. Conversely, apartments in suburbs in the inner-west, like Docklands, and just south of the CBD like Southbank, don’t show as great capital growth, but continue to generate good rental yield. Having an expectation of what you want to do with your rental property in the long term, can help you make your decision about where to purchase.”
Our Senior Buyers Advocate, Mark Ribarsky, says “its not too uncommon to go to an auction and see up to seven parties aggressively bidding against one another for a quality property, whether it is a house or an apartment.” The undersupply of housing, as mentioned, makes for much more aggressive bidding wars and this, in turn, drives prices up.
For sellers looking to purchase a new home, this reality is frightening, so we believe that many sellers will renovate their homes as an alternative to selling. This may be why we are seeing fewer properties come onto the market. This doesn’t mean you won’t be able to purchase a property. It does mean, however, you should enlist the help of a professional buyers advocate.
If you would like to speak to a professional to gain a competitive edge in the aggressive market, give Wise Real Estate Advice a call today.
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