2018 – new year, new market
The Year Ahead, 2018 Property Predictions
2017 saw another year of stable growth in Melbourne’s property market, leading to much speculation about what will happen in 2018 and the flow on effects for both investors and tenants.
Nationally, CoreLogic’s December Index reported a 0.3% reduction in dwelling values, slightly dampening an overall annual increase of 4.2% in the 2017 calendar year. Research showed, despite shifting conditions interstate Melbourne property remained relatively steady, enjoying 8.9% in annual growth.
While Melbourne is currently the strongest property market in Australia, there is some evidence to suggest that growth is slowing amid APRA’s tighter restrictions on bank lending, deterring some investors. This is balanced by unprecedented population growth and robust economic activity driving anticipated growth somewhere between 5-13% in 2018.
‘While Melbourne is currently the strongest property market in Australia, there is some evidence to suggest that growth is slowing amid APRA’s tighter restrictions on bank lending, deterring some investors.’
Economists are divided, although a number of experts agree that Melbourne housing prices should remain firm in the 2017-18 financial year.
In the rental market, Marshall White’s Trish Crofts predicts 2018 to be very favourable for landlords particularly in the ‘executive property’ sector, noting low levels of quality homes available for tenants across all price ranges. Trish explains, ‘These are often families from interstate or overseas looking for larger homes with a pool, to fully enjoy their stay. They want to be close to good schools.’
In the prestige end of the market, quality properties have always been in high demand with scant supply. For the year ahead, Trish predicts this will only fuel a slight increase in rental values, but landlords will benefit predominantly from an increasing selection of high quality tenants.
Melbourne’s vacancy rate is at a seven year low, sitting at 1.8% toward the end of 2017 and according to SQM Research, the average rent for a house is $518 per week and $395 for a unit, representing a one year increase of 4.5% and 6%, respectively.
With more Australian households renting, fuelling rental demand and favourable conditions for landlords, the outlook remains positive for Melbourne’s rental and investment market.
For more information on prestige rental properties contact Marshall White on (03 9822 8711) or see our current properties for lease.