With 2018 well underway, it’s time to look ahead to the coming months in property. Below are our five predictions for Melbourne real estate in 2018:
Melbourne property prices: cooling in 2018?
The great Australian real estate boom may finally be over, with many experts expecting a drop in growth in the capital cities in 2018. Although still expected to slow somewhat, Melbourne prices are expected to be sheltered from cooling due to its population growth forecast.
This means that those considering selling in 2018 may do so sooner rather than later to avoid losing out as values decline.
Melbourne houses will lead national tables
Yes, you read that right. House prices won’t grow as fast in 2018 as in recent boom years, but several sources expect Melbourne real estate prices to lead the nation over the next two years. NAB released its Residential Property Survey in October 2017 predicting six fastest growing suburbs in Melbourne and towns for Victoria – so we’re likely to see houses in the CBD, Toorak, Frankston, Cheltenham and Werribee enjoy above-average growth. The QBE Australian Housing Outlook for 2017-2020 anticipates that Melbourne house prices will grow a cumulative 10% by 2020.
However, while this is great news for homeowners, the unit market is not quite as buoyant. With the booming construction of apartment buildings, NAB expects that 2018 will see a growth of 1.2%, but will fall in 2019 by 2.4%. QBE has predicted an overall fall of 4.8% by 2020 for apartments.
The bottom line here is to do your property market research in your area so you can get on top of the current real estate trends in your suburb. An in-depth property value estimate is a good place to start, and you can request one for free in just 30 seconds with Upside. Your report will include prices and details about sales in your area to help give you an idea of the value of your property.
Melbourne first-home buyers will benefit from stamp duty concessions
It’s likely that we’ll continue to see activity in the first-home buyer bracket. After the state government exempted properties under $600,000 from stamp duty for first-home buyers (along with reduced tax liability for properties up to $750,000), significant activity was seen from first-home buyers. This will give owner-occupiers a leg-up against investors who are often competing in similar areas.
Mortgage rates to continue to remain low
With the Reserve Bank of Australia unlikely to significantly raise the official cash rate – currently at the historic low of 1.5% – mortgage rates are likely to remain low. This is good news for those who are renegotiating mortgages or applying for the first time and may lead to more competition when it comes to purchasing houses, with people looking to capitalise on cost-effective borrowing rates.
More upgraders renovating
Speaking of stamp duty, while the entry-level end of the market is getting a stamp duty cut, the rest of the market is continuing to experience the burden of rising stamp duty rates. As reported by Domain, in conjunction with property increasing in value – particularly in Melbourne and Sydney – the cost of stamp duty has soared. Stamp duty on a median-priced house in Melbourne is currently $47,506 – two decades ago, it would have been $7,680 in present-day money.
This trend is leading more people to renovate rather than move. According to Westpac research from November 2017, there was a 14% increase in the number of people looking to renovate within five years in 2017 vs. 2015. The number of people planning to move, meanwhile, had dropped. This could mean that larger or family homes may be in shorter supply in the coming years.
Whether prices go up or down in the coming year, one thing’s for sure: it’s an uncertain market, and we could be seeing significant changes. If you’re considering selling property in Melbourne, get in touch today for our top real estate advice for selling your home.