, according to leading property analyst Michael Matusik.
Speaking at the Urban Development Institute of Australia (UDIA) conference in MelbournMelbourne’s residential property market is now oversupplied and may take years to recovere on February 3, Mr Matusik said low confidence and high vacancy rates were keeping investors out of the market.
“The Victorian market is now oversupplied with both new and existing stock,” he said.
In his presentation, Mr Matusik indicated the difference between new supply and current underlying demand for residential property in a graph (below), which compared Victoria to other states and territories in Australia.
“Melbourne is past its peak and is at 1 o’clock on the property clock. It might take two to three years to recover, at best.”
In addition to oversupply issues, Melbourne now has the highest vacancy rate of any Australian capital at over 4 per cent, Mr Matusik said.
“Confidence is low, end prices are high and there are fewer jobs being created,” he said.
“Rental growth is still positive, but sluggish and likely to remain so.”
However, while there is no doubt that the Melbourne market has softened, industry figures maintain it is still a decent market for investors.
Speaking to Smart Property Investment, Real Estate Institute of Victoria (REIV) spokesperson Robert Larocca said investors should take note of the fact that nine out of 10 Melbourne suburbs have median house prices below their peaks.
“Homes are less expensive than they were a year ago, the cost of money is less expensive than it was a year ago, so I can’t imagine there being a better time to be buying,” Mr Larocca said.
“I think in a year or so people may look back on this time in the market and wonder why they didn’t act on their impulse and buy.”
Source: Matusik Property Insights