Melbourne’s property market, which was known for its strong growth and stability, is now seeing a change. Recent data from PropTrack shows that Melbourne’s property values are slowing down, while Brisbane is seeing a big increase. This marks a significant shift in the Australian real estate market.
Brisbane is now leading the property market for the first time in 14 years. Currently, Brisbane’s median home value is $951,000, which is higher than Melbourne’s $912,000. This marks a big change in the market. According to PropTrack’s real estimate valuation model, Brisbane’s median house values increased by 4.4% over the last quarter, while Melbourne’s grew by only 0.1%. Brisbane’s units also rose by 7.4%, whereas Melbourne’s unit market saw a small drop of -0.1%.
The Impact of the Pandemic
The pandemic hit Melbourne hard. The city experienced a lot of people moving to other states and a drop in investor interest because fewer people wanted to rent. Experts say that Melbourne lost many residents to other states and had closed borders, which caused investors to leave the market due to lower demand for rental properties in the city.
Melbourne’s Pricing Lag
As of June 2024, Melbourne’s property prices are still 3.89% lower than their peak before the downturn. This is different from cities like Sydney, Brisbane, Adelaide, and Perth, which have all reached new highs. A recent survey by realestate.com.au found that only 19% of people in Victoria think it’s a good time to sell, while more people in Queensland and New South Wales are more optimistic.
What is happening in the Market?
Even though property price growth has slowed, Melbourne’s property market is still busy. Sales in June were up 16% from last year. However, more than a third of properties sold for less than their asking price, showing that buyers are cautious due to high interest rates and a higher cost of living. In contrast, over half of the properties sold for more than the asking price in Brisbane and Adelaide, and an impressive 77% of sales in Perth were above the asking price.
Despite these challenges, experts believe that Melbourne’s market is adjusting rather than declining sharply. They think Melbourne is just going through a phase where prices are stabilizing after years of strong growth. This adjustment could lead to future stability and growth as the market finds its balance.
Conclusion
While Melbourne’s property market is growing more slowly compared to Brisbane right now, it is still active and strong. The current adjustments might help Melbourne become more stable and grow again in the future as it goes through this transitional period.
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