The inner East and South-East suburbs of Melbourne have seen the largest property price falls in all of the urban areas of Melbourne and Sydney. And our two biggest cities have had the greatest falls of all capital cities over the last year. As detailed late last year, these suburbs were exposed to the Perfect Storm. At that point annual falls in Melbourne were running at around 5%. Over the next six months this fell to an annualised peak of just over 10%. But thanks, in particular, to the heavy Asian influence, this region fell by over 25% as they withdrew from the market. The biggest drivers in the property market on the way up, also helped accelerate the fall.
They are now back. Not in the numbers seen during the peak of the cycle but back in significant numbers. So, the areas suffering the biggest falls are now primed to offer the best bargains in a very long time. For the record, we don’t expect a rapid turnaround, nor the steep growth of the heady days of 2017 but we expect there will be no better opportunity to buy into these areas than current prices.
Prices will still be patchy and unpredictable but it’s unlikely to get any better to buy in. Of course, if you are buying and selling in similar locations, whether the market is up, down, or stable, it doesn’t really matter when you transact. Then, it’s all about the changeover price. Also, the more important things in life than money, like health, lifestyle and family. But for those looking to upgrade, invest or enter the market for the first time, either seize the opportunity now or we expect you will regret your hesitation.
There are still risks; there always will be. An old piece of advice that has stood as sound counsel is “don’t wait for all the lights to turn green to get started”.
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