Melbourne Property Market 2020: Experts Predict Market Movements
Melbourne’s property market is expected to steam ahead in 2020.
Experts have forecast smooth sailing this year, after weathering the banking royal commission, federal and state elections, and policy changes in the past 12 months.
Real Estate Institute of Victoria president Leah Calnan said confidence returned to the market faster than expected after the “chatter about removing negative gearing” ended.
“What we’re seeing is the research got it wrong in 2017 and 2018, and there is a nice return of people to the market ahead of schedule,” Ms Calnan said.
“There will be plenty of opportunities to buy and overall more positivity.”
Rental affordability could become a problem, she added, with Melbourne’s vacancy rate well below 2 per cent.
“A comfortable level is about 3.5 to 4 per cent,” Ms Calnan said.
“We’re going to potentially see rent increases and a lot more competition for what’s available.”
Realestate.com.au chief economist Nerida Conisbee said Melbourne’s middle and outer ring of suburbs could expect strong returns at the start of the decade.
“There are low interest rates so getting finance is a lot cheaper, which is good for buyers and creating a lot of demand. It is putting vendors in a good position because there is not much stock available,” Ms Conisbee said.
Tax cuts and infrastructure projects that could be announced in the upcoming federal budget may also give regional areas an extra boost, she added.
Advantage Property Consulting director Frank Valentic said vendors were in the box seat.
“Buyers are definitely going to have to push harder and while it’s important to stick to your budget, it might need to be increased,” Mr Valentic said.
“All the predictions for strong growth in Melbourne are only going to fuel the fire.”
The federal government’s First Home Loan Deposit Scheme opening up to 10,000 hopeful buyers could also add to demand.
But leading property data firm CoreLogic International’s chief executive Lisa Claes said land tax reforms were needed to further improve the market.
She also said calls for changes to stamp duty would also strengthen.
“The decline in property values in the first half of 2019, as well as low interest rates, did little to improve affordability and so policy makers must continue to explore alternative, structural solutions,” Ms Claes said.
Melbourne’s auction market will spring back to life in February.
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