Melbourne Property Market Outlook for 2024: What Investors Need to Know
Are you curious about Melbourne’s property market in 2024? Here are some insights and forecasts you need to know from Create Real Estate, your trusted experts in Melbourne property investment.
Current Market Performance
Melbourne home prices saw a modest 3% growth over the past year, with unit values increasing by 2.5%. Despite an 11% rise since Covid, prices remain 4% below their peak in March 2022. Clearly, the Melbourne housing market has not performed as strongly as some other capitals over the last year. However, Melbourne’s property values are expected to gain ground as we move through 2024, creating a window of opportunity for strategic property investors and homebuyers to take advantage of significant upside potential.
Why has the Melbourne Market Underperformed?
Some key factors reducing demand in Melbourne include:
Greater Housing Stock Availability: Compared to other states, Melbourne has a larger number of properties available for sale.
Investor Dissatisfaction with Government Policies: Reserve Bank policies and rates have led to decreased investor interest.
Rising Rent and Living Costs: Increased rent and living expenses have caused some people to move into shared accommodations or return to their home countries.
Competition Among Renters: Melbourne’s strong economy and job market continue to attract people, driving demand and competition among renters. According to SQM Research, these factors have driven down vacancy rates to 1.5%.
Key Trends for 2024
While Melbourne has underperformed in 2023, it has been one of the strongest and most consistent performers over the last four decades. Here are some indicators suggesting a potential upward trajectory for Melbourne’s property market:
Decline in Vacancy Rates: Reflecting Melbourne’s strong economy and growing population, lower vacancy rates create opportunities for investors and homebuyers with a long-term perspective.
Stabilising Interest Rates and Controlled Inflation: As interest rate hikes stabilise and inflation remains controlled, Melbourne’s property market is positioned for continuous growth.
Increased Buyer and Seller Confidence: With confidence in both buyers and sellers picking up, we expect increased activity from strategic investors and homebuyers looking for upgrades.
Rising House Prices in Key Suburbs: Over 50 Victorian suburbs are seeing house prices exceed the average national growth rate, with firm indications that property values and rents will continue to rise.