The Victorian property market may drop-off as the end of 2014 approaches, with slowing household income growth, cost of living pressures and concerns over housing affordability gradually taking their toll.
Opteon Victoria’s head of residential, Stuart Bridgman, said these factors meant prices across the state were likely to increase more modestly compared to the earlier part of the year – but suggested there were still opportunities for investors in the market.
“General demand in the market has been increasing from late 2013 up until now and we would expect this to continue, albeit at a slower rate, than previous years,” he said.
“As we see stronger and weaker pockets form throughout Victoria, it is important for investors and those looking to sell to remember that any growth in value is dictated by supply and demand and this will vary between suburbs and even precincts within suburbs.”
Mr Bridgman said high-quality and well-renovated properties in prime locations will continue to attract strong interest from buyers, but did note ongoing concerns about a potential oversupply of inner-city high-rise apartments in Victoria’s capital.
“We are finding that there is still strong demand for older, character-style housing at the pointy end of the market, and these types of properties are continuing to attract a premium from buyers,” said Mr Bridgman.
“However the same bullish sentiment doesn’t necessarily apply for inner-city apartments due to some concerns with increasing oversupply for Melbourne’s CBD and nearby locations, over the next few years.
“While many high-rise apartments are being acquired by overseas purchasers and SMSF investors, we could see these numbers drop-off as the economy weakens and proposed changes to overseas investment are implemented” he added.
Mr Bridgman said the middle and some outer-eastern Melbourne suburbs have seen significant demand and capital growth over the past 18 months. Properties located in popular public school zones and also experienced high demand and subsequent rises in property value, he said.
Looking beyond the CBD, Mr Bridgman said stable vacant land sale numbers throughout Melbourne’s western and northern growth corridors have largely offset the impact of weaker demand for residential property in the south east.