Sub Prime issues, stock markets falling all over the world, interest rates going down in the US and potentially up in Australia. We have a ten year drought seemingly coming to an end with FLOODS which may well reinvigorate our massive primary industry. The Chinese and Indian economies are becoming the dominant force throughout the world and they are major trading partners of ours. Chris Richardson from Access Economics has been reported to have said Iron Ore price increases for the year will inject more spending into the national economy than our stock market losses of last month. So what is going to happen to the Melbourne property market?? Anybody that tells you they know, is joking.
The Sydney market is flat, Queensland is under water, Perth has slowed and Adelaide is a very small market. Melbourne’s population is said to be growing at 1000 people per week. This is higher than any other capital city in Australia. Demand for housing is high and supply is short. It means that property prices in Melbourne will most likely continue to rise at a very healthy rate. Maybe not the 20 – 30% of last year, but I would consider in the high teens to be probable if you buy well.
Whilst the fastest growth corridors are still the outer west and outer north, for the first time in decades municipalities such as Hobsons Bay, Glen Eira and Monash showed population increases.
Buying well is not only about negotiating the lowest price. It means making a good choice of property, assessing it correctly and then negotiating it in a timely fashion. Keep in mind that if the property is actually good, there will be competitors trying to buy it out from under you.
We will have a better understanding of how properties will perform this year once we see the February auction results. Until then, the signals from the local agents have been mixed and no clear pattern has emerged yet.
Ian James