Media release – Date MELBOURNE CBD PROPERTY MARKET SHOWING SIGNS OF RECOVERY Joe Cimino from First National Real Estate City Residential expects the 2012 Melbourne CBD property market to be quite subdued and says while there are encouraging signs, there is still some distance to go. “The current falling market in the Melbourne CBD is set to continue in 2012, due to reduced buyer confidence,” Mr Cimino said in the First National 2012 Property Market Outlook released this week. “Melbourne CBD currently has an oversupply of new and used apartments as a result of exponential development over recent years. “The overseas market has stopped buying due to the dollar being so strong and resales are not achieving what they were originally sold for off the plan. So, speculative buyers are also reticent. “All these factors combined have slowed the Melbourne market and the situation is not expected to improve until this changes. “However, this provides real opportunities for investors to pick up some real bargains, which should see even better returns when the market does start to move.” Mr Cimino believes default mortgages will increase in 2012 as unemployment becomes an issue for many and single incomes will not be able to service mortgages. According to the Outlook, residential property prices in the Melbourne CBD are expected to continue trending downwards, with decreases of between 5 and 10 per cent as the market levels out. The rental market should see vacancy rates remain flat with potential for upward movements of up to 1 per cent due to a steady supply and demand, which should see weekly rent prices also increase. Mr Cimino expects investors to be the strongest growth segment, with increases in activity expected to be in the vicinity of 1 to 5 per cent as a result of excellent return on investments. Interest rates are expected to decrease by up to 0.5 per cent in the first half of 2012, although Mr Cimino does not expect this to impact dramatically on the Melbourne CBD property market as “it will take more than low interest rates to lure back the overseas unit/apartment buyer,” he said. The economic events in Europe and America are expected to continue to impact on buyer confidence.
The introduction of the carbon tax is expected to affect the property market as well, further eroding consumer confidence. -
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Issued by: First National Real Estate. For further information or to receive a copy of the 2011 Property Outlook, Joe Cimino, Principal from First National Real Estate City Residential, on 03 9804 5551.