Melbourne property prices are expected to fall between 7 to 10 per cent by the years’s end, wiping up to $94,000 off the city’s $940,000 median house value, according to a new report.
The PropTrack Property Market Outlook Report found Melbourne was set to experience one of the nation’s biggest declines, after prices already tumbled 5.2 per cent last year.
PropTrack’s forecast was based on the assumption the cash rate would rise a further 50 basis points from its current 3.1 per cent level, starting with the Reserve Bank of Australia lifting rates by 25 basis points Tuesday, and another 25 points later in the year — then remain on hold until 2023 ends.
NAB group chief economist Alan Oster last week predicted an 11 per cent drop in Melbourne prices, while Westpac senior economist Matthew Hassan forecast a more modest 8 per cent reduction in national house prices.
PropTrack economic research director Cameron Kusher said there was “less urgency to buy and to sell at the moment” in Melbourne.
“I feel, once we stop getting changes to interest rates every month, it will give people more confidence,” Mr Kusher added.
He said if Melbourne prices ended up falling 11.8 per cent, they would be back to pre-pandemic levels.
“Melbourne’s probably most at risk of that happening, just because prices didn’t grow as much there as elsewhere because it spent so long in lockdown,” he said.
As Covid hit Australia in March 2020, Melbourne had a $740,000 median house price and $590,000 median unit price.
December 2022’s Melbourne median house price stood at $940,000 and the median unit price was $605,000, while regional Victoria’s median house price was $615,000, and $409,000 for units.
Real Estate of Victoria president Andrew Meehan said it was important to remember predicted market trends were “just that, predictions”.
“The post-Covid real estate boom has placed Victorian property in a stronger position than ever before, a trend we continued to see grow in pockets of outer Melbourne and our regional areas in the last quarterly figures,” Mr Meehan said.
source: realestate