Opportunities for Melbourne investors
Melbourne houses provide an excellent long-term opportunity for homeowners and property investors, according to Pete Wargent, co-founder of Australia’s first national marketplace for buyer’s agents, BuyersBuyers.
Mr Wargent said, “investors and homebuyers should not become too confused by the short-term impacts of border closures and remote work. Melbourne has become a global city, and its long-term economic growth and population projections are extremely strong.”
“The employment market in Melbourne is also in robust condition, with a very low unemployment rate, strong jobs vacancies, and very good projections over the coming years. This, in turn, will attract a large number of migrants to the city as soon as the border restrictions are fully removed.”
“Melbourne experiences a continual shortage of houses in the landlocked inner-ring and middle-ring suburbs of the city. Due to the more substantial impact of the COVID on Melbourne and buyer sentiment, the property market has not been as strong as that of Sydney over the past year.”
“And consequently, houses in Melbourne are now substantially more affordable than those in Sydney” Mr Wargent said.
Figure 1 – Daily home values by capital city 2019-2022
Bright long-term for Melbourne
BuyersBuyers CEO Doron Peleg said “over the long run, we can expect to see the population of Greater Melbourne rise towards 9 million by the middle of the century”.
Figure 2 – Victoria past and projected population (Source: Planning Victoria)
“Naturally, this will drive an increase in population density over time, and there will be increasing pressure on land values in popular suburbs with strong access to amenities and employment hubs.”
“While there has been some change in working arrangements over the past two years, the bulk of higher-paying professional and executive roles will still be based in Sydney and Melbourne” Mr Peleg said.
Steadier market conditions
BuyersBuyers co-founder said that 2022 is off to a steadier start for Melbourne’s housing market.
Mr Wargent said, “it’s relatively early days, but the weekend’s activity showed a fair percentage of properties auctioned either withdrawn or passing in, suggesting that buyers are a bit more cautious about the prospect of rising interest rates.”
“Perhaps vendor expectations might also need to be adjusted a little to reflect the shifting landscape.”
“Overall, buyers of houses in Melbourne should look through the short-term noise. With borders reopening, rental markets will be very tight for houses in 2022, and rising rents tend to shift the buy versus rent equation towards purchases’.
“The long-term fundamentals for houses in Melbourne are among the strongest in Australia, so buyers should have this front of mind, as opportunities abound.”
“There’s a fantastic opportunity for buyers to build their wealth over the long term, and we have seen an uptick in demand from buyers for Melbourne over Sydney” Mr Wargent said.
