Frank Valentic’s Monthly Property Market - May 2018
By Advantage Property | 7th May 18
What you need to know about the property market in May.
Melbourne's property market continues to achieve consistent clearance rates averaging around 68%. There is definitely more opportunities for buyers as the clearance rate was around 78% last year at this time. Though, we are still seeing some run away results and record results as we saw with a Cranbourne North house selling for a record $2,350,000, a number of Brighton beach boxes selling for records and then a $10,500,000 sale in Moonee Ponds eclipsing its record by millions. There are less of these runaway results but we are still scratching our heads at many auctions as we saw in Dromana where a block of land sold recently for $791,000 over reserve. We are seeing a slow down in the market as we are transitioning from a sellers market to a buyers market and there are now around 25% of Melbourne's properties selling at auction with 75% selling privately.
In good news for investors, APRA have said they will now relax lending criteria from the 1st of July. As of late 2014, APRA made it more difficult to get funds and limited amount of investment by investors to 10% of total lending. This will now be changed and is welcome news for new investors and repeat investors that were unfortunately unable to borrow once APRA made those changes. It looks like interest rates will continue to be on hold until the middle of next year and we haven't seen a rate increase from the RBA for a record time since November 2010, spanning back seven and a half years now.
It is always important to see where infrastructure projects are going because that can improve the amenities and the actual infrastructure of a suburb and help increase the popularity of that suburb and the capital growth in that area. There is proposed to be a fast rail link from Geelong to Melbourne as $50 million has been funded to investigate this and that will keep increasing the popularity of Geelong and also areas like Ballarat and Bendigo. We saw Dandenong be given much funding twelve years ago and now many people are seeing it as Melbourne's second city, as they were granted $261 million to revitalise Dandenong as a city and that has had a huge positive impact in the area.
Melbourne continues to benefit from strong employment growth as there were 86,000 jobs created last year and there was only a low 5.2% unemployment rate which is very consistent with the previous years. There hasn't been much change in the last few years and overall Melbourne continues to benefit from strong employment.
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