Melbourne house prices have been tipped to fall by 5 to 10 per cent this year as Australia’s property cycle enters a downward phase. CoreLogic data released on Tuesday showed national dwelling values fell 0.3 per cent in December, adding to a run of flat or negative growth and marking the first negative quarterly result since April 2016. The median price in Sydney fell 0.9 per cent over the month to $895,342, Melbourne was down 0.2 per cent to $720,417, Brisbane was flat on $491,391, Adelaide was up 0.2 per cent to $432,772, Perth fell 0.1 per cent to $463,886, Hobart was up 1.5 per cent to $403,800, Darwin fell 0.9 per cent to $424,901, while Canberra was up 0.2 per cent to $591,011. The annual growth rate in the nation’s biggest housing market is now tracking at 3.1 per cent, compared with the peak of the cycle seven months ago when values were rising at an annual rate of 17.1 per cent. Weak auction clearance rates point to more price falls ahead as the impact of APRA’s tightening in lending standards, deflated expectations for price gains and rising supply continue to impact. “The Melbourne property market appears to be following Sydney down although stronger population growth is providing some support. Prices in Sydney and Melbourne are expected to fall by around 5 per cent or so this year. “Still low interest rates and support for first home buyers are providing some support and should help ensure only moderate price falls. A property crash is unlikely in the absence of much higher interest rates and/or unemployment — both of which are unlikely.” Advantage of first home buyers Melbourne’s property market is set to cool in 2018 with first-home buyers primed to reap the benefits, experts say. Fewer investors are expected to put their money into housing because of stricter lending criteria for interest-only loans, and it’s predicted this will assist in slowing Melbourne’s house-price growth.National Australia Bank chief economist Alan Oster said that despite this, the Melbourne market would still grow by about 5 per cent – a modest result compared to the year to September 2017 when the median house price grew by 13.9 per cent, reaching $880,902. Melbourne’s property market is set to cool in 2018 with first-home buyers primed to reap the benefits, experts say. MELBOURNE is Australia’s equal fastest selling capital city housing market, with the typical home being snapped up in just 33 days. The city was tied with Hobart, and the pair boasted much speedier private treaty markets than the remaining Aussie capitals, according to new CoreLogic figures. Private sales accounted for about 70 per cent of all property transactions in Melbourne, despite it being considered “the auction capital of the world”, CoreLogic state director for Victoria Geoff White said. Mr White said rampant buyer demand was keeping Melbourne’s average days on market down, with properties in popular parts of the city commonly selling within a week. The CoreLogic Property Pulse report revealed that at the end of 2017, properties sold
privately in Australia took an average of 45 days to change hands and across the combined capitals, 40 days. Fewer investors are expected to put their money into housing because of stricter lending criteria for interest-only loans, and it’s predicted this will assist in slowing Melbourne’s house-price growth. Stricter lending criteria for investors will see Melbourne and Sydney's markets cool, experts say. Stricter lending criteria for investors will see Melbourne and Sydney’s markets cool, experts say. Photo: Bloomberg National Australia Bank chief economist Alan Oster said that despite this, the Melbourne market would still grow by about 5 per cent – a modest result compared to the year to September 2017 when the median house price grew by 13.9 per cent, reaching $880,902. “We’re not talking about any sort of crash – we just don’t see that happening,” Mr Oster said. “It’s a sober outlook, but it’s not falling off a cliff.” Mr Oster expected the Reserve Bank would raise interest rates by 50 points in August this year – taking the cash rate from 1.5 to 2 per cent – further affecting the rate of growth across the country. Real Estate Institute of Victoria president Richard Simpson said that, with investors backing off and the state government’s stamp duty concessions for first-home buyers, young purchasers could be in with a fighting chance in 2018. Vendors were also likely to be aware of Melbourne’s slowing market conditions and accordingly set “more realistic” asking prices, Mr White said. He urged them to do so, as when properties took longer to sell, buyers became more inclined to negotiate. Properties that lingered on the market for a long time accordingly offered good opportunities for househunters, he said: “As time goes on, you could anticipate vendors becoming motivated to consider offers outside the range they were originally willing to expect.” A Stawell house that’s been on the market for almost nine and a half years has staked its claim as the state’s longest lingering listing. The three-bedroom abode at 23 Ararat Rd has a $385,000 asking price, but its seller is open to reasonable offers Investing in commercial property offers many advantages and less hassles over the traditional forms of investing. Large depreciation & tax benefits Higher net returns per annum Yearly rent reviews Longer term tenancies Tenants pays all outgoings No on-going maintenance issues GST is fully refundable Melbourne hits record high Melbourne’s real estate sector has been hot on your heels for some time now, and new figures reveal it is continuing to march its way towards becoming Australia’s fastest-growing property market.