Property Market Update

Over the last six months, Melbourne’s property market has seen its momentum fade but while some commentators have predicted doom, industry leaders are telling us that the market remains essentially stable.

Melbourne property prices have drifted lower with most property data agencies putting Melbourne’s fall at 1% - 2.5% over the last 12 months. Auction clearance rates have also declined, now hovering around the 55% - 59% range, which indicates a market with a slight bias towards buyers, not a market in trouble.

Industry estimates place the number of houses advertised for sale at 25% below last winter’s levels, a sign of tightening supply which will help place a floor under prices. On the other hand, the number of new apartment developments in central Melbourne and some outer suburban areas such as Dandenong has risen rapidly. 63% of developments with planning approval have commenced construction in the last 12 months.

This expanding number of apartments is one of the reasons why rental vacancies have risen to above 2% across Melbourne, the first time vacancies have been at this level since 2005. This increasing vacancy rate signals that the number of tenancy turnovers is likely to rise over the next twelve months, particularly in the central Melbourne apartment market.

For residential property managers, that means the workload is set to rise over the next 6 months and the pivotal January-February period likely to be the busiest it’s been in years!