- The Melbourne market median price recently went above the $1M mark
- In regional Victoria, average house prices are half that
- The continued strength, or otherwise, of the Vic market will depend on many factors
The phrase “The Australian Dream” has had some re-defining in recent years, but in its original twentieth-century sense it refers to the ability of everyday Australians to be able to afford to buy a home, which can lead to a “better life” as well as an “expression of success and security.”
With the property boom continuing apace, it can be easy to get carried away in screaming headlines fed by all the latest property data, auction clearance rates and lines of people at home opens.
Many will be left behind and not able to step onto the lowest levels of property ownership.
The CEO of the Real Estate Institute of Victoria (REIV) Gil King argues that we need to put this all “into perspective”, consider the sustainability of the property market, and also its significant contribution to the broader economy.
“The real estate sector [was] abuzz with talk about REIV’s March quarter median price data, which showed historic increases for a number of areas in Melbourne and regional Victoria,” Mr King said in a recent statement.
That median price had jumped over the $1 million mark for the first time. Quite a milestone.
Considering the average had risen 8.8% in a single quarter, this was doubly amazing. Off went the media, feeding more stories of property booms.
Digging deeper, we can see that in regional Victoria, house prices went above $500,000 for the first time, notching up 12.3% annual growth. That’s quite some growth, but still half the price of city dwellings.
“Gains in regional Victoria show that the benefits of the strong market have been spread around the state, not just in the traditional inner suburbs.”
“Victorians are looking beyond the inner suburbs to find the lifestyle they want. These intra-state migrants will help to create jobs, boost local businesses, and revitalise regional communities.”
Gil King, CEO, REIV
Everything we already know – low interest rates, first homeowner grants, positive economic news – is feeding into higher market confidence. For most people, buying a property is the largest, lumpiest purchase they will ever do. They are far less likely to do so in times of uncertainty. But once things settle down, and then look brighter, they will be more interested.
Accordingly, there were 35,000 property transactions across Victoria during the March quarter, the highest since 2015.
This is all positive news, argues Mr King. But how sustainable is the Victorian property market moving forward?
According to REIV, this will greatly depend on:
- how long the international borders will be closed for,
- the impact of continued low numbers of international students and migration,
- the ending of first homeowner grants,
- effects of the new Residential Tenancies Act on owners, especially if investors see the new rules as “onerous”, and
- what the RBA does with interest rates or credit rules.
For now, Mr King believes the Aussie dream of owning property lives on, and the strength of the property market should be something to celebrate.