Melbourne’s Blue-Chip Suburbs’ Median House Price Set For Swift Recovery
Recent downturns in property prices across Melbourne are set to recover as Government-enforced quarantines are relaxed and everyone returns to business as normal. Family-friendly neighbourhoods, blue-chip suburbs and close-by regional towns are expected to bounce back from the recent slump in the market at the fastest rate.
Strong market conditions before the pandemic resulted in a positively-geared market. Strong population growth, a slowdown in new residential construction and a low volume of listings contributed to higher property prices across Melbourne at the end of 2019; 10% higher than in December, 2017.
Predictions about Melbourne at the start of the year were strong, with prices in Melbourne expected to increase by 8% by the end of 2020. More-recent foresight, however, has painted a grim picture for the Melbourne property market, with prices potentially set to fall by 30% by the end of the year. However, director of data house SQM Research, Louis Christopher, has said that if business resumes as normal by end of May, then confidence in the housing market is likely to return. At the current rate of new coronavirus cases in Australia, and with media purporting that the gradual easing back of lockdown restrictions will begin soon, it’s undeniable that Melbourne’s property prices are primed to return to their former value sooner rather than later.
Louis Christophe said, “Assisted with all the stimulus announced and the economic damage relatively limited, it would mean a fall in housing prices recorded for the June quarter but a bounce back in the September and December quarters.” This is certainly positive news for Melbourne’s property market.
Australians have recently enjoyed the lowest interest rates in most people’s lifetime, and three years of strong median house price growth following the recession of the ‘90s suggests that Melbourne’s blue-chip suburbs are in a good position to resume growth, despite the lockdown. A six-month hiatus on a rise in property values is probable, but strong conditions prior to the pandemic will help the city recover by the end of the year.
Narre Warren North, Box Hill, Blackburn and Albert Park were among a list of suburbs that had the largest housing price increase between the GFC of 2008 and the 2019 coronavirus pandemic. The proclivity of new home owners to move to suburbs housing primarily owner-occupiers is part of the reason these suburbs maintain their appeal and why their recovery post-covid-19 will be swift.
Once public auctions resume, a strong response is expected, and, indeed, many property owners have expressed their interest at listing their houses in Spring, 2020. Levels of interest in buying property will undoubtedly depend on the duration of social distancing requirements and the impact higher levels of unemployment have on the wider economy.