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The Melbourne housing market is seeing capital growth stabilise as confidence returns to the property sector, a Victorian valuation firm has said.
Opteon Victoria managing director Chris Knight predicted prices would be less volatile over 2014 than the previous two years due to improved consumer sentiment and low interest rates.
“Melbourne’s record median house prices in the March quarter were an encouraging sign of life and a return to more consistent prices across all sectors,” Mr Knight said.
According to recently released data from Australian Property Monitors, Melbourne saw growth of 2.8 per cent for houses in the March quarter.
Over the year, the city has seen house values rise by 11.7 per cent.
Median prices hit a high of $604,110 for houses and $419,702 for units.
Mr Knight said traditional buyers, including upgraders, downsizers and investors, were still active in the market.
In addition, however, he believes foreign investors and self-managed super funds are having a significant impact.
“Overseas buyers are also eyeing the local market, which is driving up demand for residential property,” he said.
“But a new breed of investor – the cashed-up, self-managed super fund brigade – is starting to make its presence felt in both the residential and commercial property markets.”
While the first home buyer market remains “competitive”, Mr Knight believes opportunities exist in the medium-density sector.
“A surge in the conversion of larger allotments to multi-townhouse and terrace-style developments in established suburbs has created a number of entry-level opportunities,” he said.
“These conversions have an entry-level price point of around $400,000 and are great for first home buyers.”