The Melbourne residential property market saw great resilience in 2020 and has strong growth projections for 2021 and the years to come.
Amid the 2020 COVID-19 pandemic, Melbourne's property market only released a -0.9% change in dwelling values over the year, which proved many economists wrong as the drops in values for capital cities was projected at 30%, again reinforcing the strength of residential property as an asset.
Property prices have rebounded sharply with early signs of recovery in late 2020. The market realised a 0.7% month-on-month rise in dwelling values across the city [1].
Strong Activity At Auctions
In the back end of 2020 and early 2021 the auction markets have come from strength to strength with high supply and demand, from sellers and buyers.
As noted by CoreLogic Australia, the preliminary auction clearance rates during the first week of 2021 showed great things for Melbourne. So far, 731 auction results have been collected, returning a preliminary clearance rate of 73.6%, increasing on last week’s preliminary clearance rate of 71.7%.
Where To Now?
The growth for the Melbourne property market is projected well into the future due to the macro and micro fundamentals supporting the market.
Key macro influences such as the 2020-21 budget will play a crucial role in delivering infrastructure spending and job creation that can have a direct impact on the ongoing positive growth of the Melbourne property market.
Upcoming Infrastructure Projects
One factor that speaks to the growth of the Melbourne property market in 2021 and beyond is the significant investment in infrastructure projects.
One of the key projects that received further funding in the recent budget is the Suburban Rail Loop, having an investment of $2.2 billion [2].
The Suburban Rail Loop will provide crucial connections to employment, health, education, and retail centers in Melbourne’s middle suburbs. It will do great things for employment, creating up to 20,000 jobs during construction and kick-start the careers of 2,000 apprentices, trainees, and cadets.
Suburban Rail Loop will be delivered in stages over several decades, with Stage One between Cheltenham and Box Hill to be built first.
Construction is set to start on stage one between Cheltenham and Box Hill in 2022.
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Jarryd Gauci – Property Investment Consultant
P: (02) 9939 3249
Disclaimer: When considering purchasing a property, it's always prudent to seek the advice of an appropriately qualified professional to determine which strategy is most appropriate for your individual circumstance.
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