Victoria remains one of the country’s highest-achieving markets, but oversupply remains a looming issue
Current price growth in the city is under-pinned by strong overseas migration and a vibrant economy. Data from RP Data shows Melbourne is currently the most popular designation for overseas migrants, and the second-most popular for interstate migrants.
However, these immigration figures also show the in-flow of migrants is beginning to taper off. While the market is currently robust, BIS Shrapnel warns Melbourne may begin to lag.
As migration eases and the economy dampens, Melbourne may face a growing over-supply, BIS Shrapnel predicts. Between now and 2017, they forecast property values will only increase by eight per cent in the city.
Currently, activity is showing no signs of slowing. The auction segment recently set a new record for the first-half of the year, with 18,000 properties sold in the six months to June, according to data from the REIV. The number of auctions is now 30 per cent higher than this time last year.
Middle-ring suburbs are most in demand at auction. Data from the REIV shows clearance rates have surpassed 97 per cent in Ashwood and 94 per cent in Vermont South. Ashburton, Wantirna and Ringwood East all also recorded exceptional auction results.
The eastern suburbs were also recognised for their outstanding capital growth. Residex identified the suburb of Balwyn North as the fastest-growing suburb for houses over the year, with an increase of 20.84 per cent, and Box Hill as the stand-out for units.
Regional Victoria is in a solid position. Residex found growth in country Victoria over the past year has been 4.6 per cent for houses.
Of all the states’ regional areas, Victoria has the lowest proportion of re-sales resulting in a loss, with only 8.4 per cent of owners losing money on their sale. In Bendigo, only 3.1 per cent of sales resulted in a financial loss while money was lost on 3.2 per cent of sales in Geelong and 5.6 per cent in Ballarat.
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