End of year Victorian market update
According to the most recent REIV auction results, the Melbourne real estate market recorded a 68% clearance rate with 1,375 properties going under the hammer. Same time last year the clearance rate was at 79% with approximately 100 more properties auctioned as the market was very strong and on an upward trajectory. It’s the inner city properties that are bringing the clearance rates down as these properties are largely un-affordable for the general population, but the outer suburbs are still performing well. Core Logic reports, “The Inner region of Melbourne had the highest number of auctions this week (304), with a preliminary clearance rate of 67.3 per cent. Meanwhile, the strongest clearance rate was recorded across the North West region, where 74.4 per cent of the 182 auctions held sold.” Suburbs such as Point Cook are hitting clearance rates up to 86% lately, much higher than the Melbourne average. We believe we will see an even bigger ripple effect with buyer interest increasing for regional hubs such as Geelong and Ballarat. In the most recent budget, the government announced it will shift 600 government jobs from Melbourne to Ballarat. You can read more about the growth and investment in Ballarat in this Courier article.
In the last few months, Buyer Solutions have received increased inquiry for help in obtaining assets in these two Melbourne satellite cities.
The current median house price for Ballarat (central) is $395k with a quarterly price change of 3.9% and 3.7% rental yields and for units, $263K with an annual price change of 6.1% and rental yields of 5.3%.
The current median house price for Geelong is $720K with a quarterly price change of 0.2% and 2.6% rental yields and for units, $535K with a quarterly price change of 17.1% and rental yields of 3.9%.
According to the Victorian state government, Victoria in Future 2016 Population and Household Projections to 2051 report, the regional areas predicted to have the highest population growth are: Greater Geelong, Mitchell, Greater Bendigo, Ballarat and Baw Baw.
The same report predicts that the largest population growth in metro Melbourne will be in Wyndham, Casey, Melton, Whittlesea and Melbourne.
With 90% of Melbourne suburbs within 10KM of the CBD and 50% of the Melbourne suburbs withing middle ring (20KM) exceeding the $1M median house price, it’s no wonder the outer suburbs and regional areas are undergoing a boom.
If you would like help in securing a property in Melbourne or regional Victoria, please don’t hesitate to contact us in the new year. We will be working hard with many clients to purchase quality, high growth assets both locally and regionally.
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