There is incredible demand for property in Melbourne – the fastest selling city in Australia and with extremely low vacancy rates
In Melbourne, house vacancy rates become tighter even as property flies off the market at amazing pace — a clear indication that the city’s property market is undersupplied. Melbourne property is the fastest selling in Australia.
Melbourne property is currently the fastest selling amongst Australian cities, at an average period of 33 days. The city tied with Hobart at the top spot, according to a CoreLogic Property Pulse report.
The report revealed that properties sold privately in Australia last year took an average of 45 days to change hands. 40 days was the average for properties in the capital cities.
The average time taken to sell a property was 41 days in Adelaide, 42 in both Sydney and Canberra, 47 in Brisbane, 53 in Perth and 75 in Darwin.
CoreLogic state director for Victoria, Geoff White said that strong buyer demand was keeping Melbourne’s average days on market low, with properties in popular parts of the city commonly selling within a week. He also said that the days to market would remain low for the foreseeable future.
“It won’t change that much unless something significant happens, like an interest rate rise that cools buyer demand, or an influx in supply,”
During this recent Chinese New Year week, Chinese investors had Melbourne property in their sights — up to 125,000 Chinese nationals were Melbourne-bound to celebrate the Golden Week holiday
Carrie Law, the chief executive of leading Chinese property website Juwai.com said that this may be the biggest week of the year for Chinese property buying in Melbourne.
A recent survey done by the portal shows that Australia is the second favourite offshore investment destination for Chinese buyers, behind the US.
Realestate.com.au chief economist Nerida Conisbee said suburbs around Melbourne’s top universities continues to draw strong interest.
“There’s still very much an education focus for Chinese buyers,” she said. “They really continue to see educational institutions as aspirational locations and are looking close to Melbourne’s best universities, Melbourne Uni, Monash Uni, RMIT.”
Low Vacancy Rates & Housing Undersupply
Even as houses fly off the market, rental prices are rising in Melbourne due to the low vacancy rates.
Figures from SQM Research show just 1.8% (9744 properties) of property in the city was available for rent, down from 2.1% (11,478) in December.
SQM director Louis Christopher said this shows that the dire warnings of apartment oversupply have not eventuated. On the contrary, it looks like there is a housing undersupply in Melbourne.
“What’s happened here is the population growth rate is a lot faster than the Australian Bureau of Statistics expected and that’s absorbed the additional stock in the market,” he said, adding that vacancy rates in the Southbank market fell to 3.9% from 6% in January 2017 and Docklands is at 2.8%.
A population growth rate of 2.4% indicates 110,000 people are moving to Melbourne every year. The vacancy rates continue to fall due to the severe undersupply of housing.
Melbourne’s price growth has lowered from the rapid rises seen previously, which will further increase rental take-up and sales. Yet, the city’s price growth continues to outpace all other mainland state capitals, at 7.3%.
Article by Ian Choong
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