Market Downturn Effects in Melbourne Suburbs
Updated: Mar 27, 2019
Here’s some update on the current market condition in Australia.
Just recently, a report was released stating that homeowners who have millionaire status living in about 40 Melbourne suburbs were extremely hit by this market downturn. Recent figures from CoreLogic show that median house values that cost $1 million in Melbourne’s suburbs fell to 168 in 2018 and dropped to 126 at the beginning of 2019. Among the city suburbs, Red Hill was affected the most. According to the reports, Red Hill lost about $442,000, which made it out of the million-dollar club.
Which suburbs were hit hard of this market downturn? Let’s find out.
Popular suburbs were greatly affected by the market condition includes Blackburn North which fell to $271,000. The other one is Burwood east which fell to $262,000. Other suburbs like Kingsville, Seddon, Maribyrnong, and Newport were seemingly having a great rise to the million-dollar list. However, because of the market downturn, these western postcodes dropped off. Experts say that this outcome did not come as a surprise to many. After the latest reports surfaced that the biggest decline in terms of the housing market in 2018, experts expected that a bigger decline will happen this year.
According to the recent figures, prices in Victoria had been falling faster compared to Sydney, which means Melbourne’s market downturn could potentially move ahead of Sydney. For the past 10 years, Melbourne’s rate has consistently grown. And this happened at the time where not much growth has been experienced in other capital cities. Now that stricter regulations are applied as mentioned in my previous blogs, someone on median income will have more difficulty buying a house, especially now that banks have become more cautious than ever before.
However, it’s not all bad news. In the face of all the stricter regulations, the Victoria housing market held up and successfully offered better housing affordability. Victoria has better economic and demographic conditions compared to other areas.
Other suburbs that experienced decline are Stonnington East, Boroondara, Whitehorse West, Bayside, and Manningham West. According to experts, the primary reason for the decline has something to do with the demand in the areas. Most of the time, people choose to buy houses in affluent areas, however, because of stricter regulations and requirements for a credit loan.
At the moment, the only regions that have not been affected badly are Sunbury, Wyndham, Yarra, and Darebin South. Melbourne, however, is still considered to hold up better than Sydney, where about 25 regions experienced a double-digit fall. Melbourne only had five. In 2018, Sydney experienced the worst decline where it reached the biggest since 1983. Hobart, on the other hand, is said to have the strongest performing capital, while Canberra, Adelaide, and Brisbane all came next respectively.
These declines are generally due to factors such as credit restrictions, higher mortgages, and reduced demands. There’s also the matter with consumer sentiments and migration. Herald Sun also reported that apartment prices suffered a decline specifically in Melbourne suburbs including Windsor, Fitzroy, and Sandringham.