By Cate Bakos
Cate Bakos Property
With Melbourne achieving the best performing capital for home value growth in the last quarter alongside Hobart, let’s take a look at what’s driving the market.
Melbourne’s inner ring property market continues to remain strong with competition coming from downsizers who have targeted inner-urban lifestyles and upgraders who are searching for their family home. Three and four bedroom properties are in short supply in areas defined by small Victorian cottages and as such, the sales results are exceeding agent and vendor expectations on a regular basis. Combined with the short supply of such dwellings Melbourne’s inner ring housing market can only be described as hot.
The introduction of higher stamp duty concessions for first home buyers (in particular waived stamp duty for purchases sub-$600K) has heated the townhouse and villa segments of the markets in this price range (notably the middle ring north, west and outer east). As these first home buyers aggressively fight for properties which only a year ago were investor targets, the competitive market conditions have buoyed these dwelling types despite strong downturn in investor numbers.
The established apartment market has picked up pace and popularity and this could arguably be put down to the first home buyer contingent who have decided to vote with their feet and give up aspirations of land to live in the inner-ring areas.
The new stock market faces further struggles now that the dutiable value of the property at the time of purchase is calculated on the contract price (as opposed to the land value plus actual improvements at the time of purchase). The incentives which investors could face pre-1 July are now limited, and combined with lower investor numbers, this market space could continue to face challenges ongoing.