Why Melbourne’s property market is suddenly so appealing
Australia’s most liveable city just became a little more attractive
2 min
Potential homebuyers may be best placed to set their sights on Melbourne, with new data revealing Australia’s largest city recorded significantly less growth than other capitals since the pandemic began.
Figures from CoreLogic show that house values rose by just 1.6 percent between March 2020 and May 2023 compared with a stronger 16.5 percent gain in Sydney prices and a whopping 45.2 percent surge in Adelaide.
The increases have started to close the value gaps between Melbourne and the smaller capitals such as Brisbane, Adelaide and Perth, said CoreLogic Asia Pacific research director Tim Lawless.
“Every capital city other than Canberra – the country’s second most expensive capital for houses – has significantly closed the house value gap to Melbourne,” he said. “At the onset of COVID, Brisbane houses were 47 percent cheaper than Melbourne. That affordability gap has closed to just 15 percent.
“Melbourne was 85 percent more expensive than Adelaide at the start of COVID but the gap has narrowed to just 29 percent and in Perth, where the gap was 88 percent, Melbourne house values are now 50 percent higher.”
Like most Australian capitals, Melbourne’s values fell at the start of COVID. During 2020, values declined by -6.7 percent according to CoreLogic, followed by substantial growth of 20.6 percent. This preceded another decline of -11.7 percent, with the market finding the floor in February this year. Since then, prices have grown 1.7 percent to May this year.
Melbourne is consistently ranked Australia’s most liveable city and was last year named the third most liveable city in the world by the Economist Intelligence Unit’s Global 2022 Liveability Index.
Mr Lawless said the latest data would likely make Melbourne a more attractive option for homebuyers and investors.
“With housing affordability remaining stretched, this improvement in Melbourne’s value proposition could place Australia’s second largest city in a more competitive position to attract a greater share of housing market participants,” he said.
“The city’s advertised supply level is trending lower and is -13.4 percent below levels at the same time last year and -7.0 percent below the previous five-year average.
“Melbourne’s rental vacancy rate of 0.8 percent in May is also one of the lowest in the country and yet another potential factor supporting purchasing demand for those with the financial capacity to enter the market.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Villa prices saw particularly strong growth, with capital values increasing by 33.4 percent year-on-year
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Dubai’s real estate market showed strong performance in the second quarter of 2024, with notable increases across the residential, office, and retail sectors, according to a new ValuStrat real estate report for Q2 2024.
Villa prices experienced particularly strong growth, with capital values rising by 33.4 percent year-on-year.
Haider Tuaima, Director and Head of Real Estate Research at ValuStrat said: “The Dubai real estate market has shown impressive growth and resilience in recent months. The ValuStrat Price Index for Residential Capital Values increased by 6.4 percent quarterly and 28.2 percent annually, reaching 178.2 points.
“Despite severe flooding caused by record rainfalls in April, the quick and effective response from developers and authorities helped to control the damage, ensuring that market activity and property valuations remained robust in the subsequent months.”
The office sector also performed well, with the VPI for office capital values surging by 31.7 percent annually and 9.4 percent quarterly, reaching 212.5 points—the highest quarterly increase in a decade.
In the retail sector, Emaar Properties reported 98 percent occupancy in their prime mall assets, while overall mall occupancy stood at 96 percent during the first quarter of 2024. The hospitality sector also saw growth, with total international guests reaching 8.12 million as of May 2024, a 9.9 percent increase compared to the same period last year. Hotel occupancy reached 81 percent, rising by 1.4 percent year-on-year.
Despite these positive indicators, Tuaima added, “The decline in transaction volumes calls for a closer examination of market dynamics as stakeholders navigate this evolving landscape.”
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
