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Outlets
House prices in Outer Melbourne grew 1.8 per cent to $830,000 over 12 months in 2022.
Photo: Contributed
ALONGSIDE the usual peaks and troughs, in 2022 the Victorian property market experienced eight interest rate rises and a confluence of pressures from the rental market.
Despite this, property in regional Victoria continues its strong performance.
The REIV’s December Quarterly Median Report reveals that regional Victorian house prices grew 8.0 per cent over the year to $610,000 while the annual median for Units and Apartments rose 6.5 per cent to $425,000.
Although the house prices in Metropolitan Melbourne saw a 3.3 per cent drop in the annual median (to $1,040,000), there are plenty of areas that continue to show value, with pockets of growth across the outer ring of the city.
Metropolitan Melbourne’s annual house price still sits above the million-dollar mark, but the quarterly price data shows opportunity for buyers as the median dipped to $974,500 (down 1.6 per cent) alongside Units and Apartments which saw a 2.6 per cent drop ($627,500).
House prices in Outer Melbourne grew 1.8 per cent to $830,000 over the 12-month period (up $14,500).
From the fledgling western suburbs, Cobblebank reported one of the highest annual growths across the state - with an 18.5 per cent increase in median house price to $635,000.
Other suburbs in the west that recorded outstanding growth were Harkness, up 17.8 per cent ($625,000), Melton (up 11.5 per cent to $470,000) and Weir Views (10.8 per cent increase to $537,000) - remaining within the affordable bracket yet showing great investment potential for homeowners.
The standout regional suburbs for quarterly growth were Kyneton - which added an impressive $100,000 to its median house price (topping out at $1,040,000) and the historic town of Stawell, growing 8.7 per cent this quarter and 21 per cent annually (to $375,000).
The most affordable areas for hopeful house-hunters looking to lock down a Unit this quarter, resided in areas such as Carlton, down 30.7 per cent to $297,250, Dandenong (17.0 per cent drop to $357,000) and St Kilda East which saw a 12.2 per cent decrease, yet remained above the half a million mark ($511,600).
REIV President Andrew Meehan said the December data demonstrates good buying opportunities for Victorians and a resilient real estate market across the state.
“The drop we’ve seen in the median prices in Metro Melbourne must be seen in the context of the rapid price growth Victoria has recorded over the past two years”, Mr Meehan said.
“Property prices still remain higher than they were in December 2020 - the post-COVID real estate boom has placed Victorian property in a stronger position than ever before, a trend we continue to see across numerous suburbs in metro Melbourne and our regional areas.
“Now, as we enter the new year and the immigration levels return, we will no doubt see continuous demand in the market as Melbourne’s population grows and investors see strong potential for growth in our state”.
Borrowers are feeling undervalued, Mortgage Choice research
NEW research commissioned by Mortgage Choice has revealed that many Australian borrowers feel undervalued by their current lenders and will consider switching to a new lender if their loyalty isn’t rewarded.
The research, conducted by Honeycomb Strategy, is based on a survey of more than 1000 Australian home loan customers.
More than half (52 per cent) said they either knew they weren’t receiving the best interest rate offered by their lender or they weren’t sure they were receiving the best rate available.
Mortgage Choice chief executive, Anthony Waldron, said, “Unfortunately, many lenders don’t reward their customers for loyalty. In a rising rate environment, it pays to shop around for a better deal and not be complacent with your home loan.”
The research revealed that 71 per cent of borrowers would be very likely or somewhat likely to switch lenders if they felt they were no longer getting the best rate available.
However, 68 per cent of respondents said they would prefer lenders to offer the same rates to new and existing customers so they didn’t need to switch lenders to secure a better rate.
“Borrowers are telling us they want pricing parity between new and existing customers,” said Mr Waldron.
“They believe they should be rewarded for their proven repayment history and for choosing to stay with their current lender instead of switching.”
As interest rates continue to rise, the gap between interest rates paid by new and existing home loan customers is widening.
While most lenders have been passing on the RBA’s interest rate increases in full to existing customers, many have been cutting their introductory rates to remain competitive.
Mr Waldron said, “Unless Australian lenders begin offering the same rates to new and existing customers rather than focusing on low introductory rates and cashback offers, it will pay to regularly review your home loan. Your broker can help you compare a wide range of products and lenders, and offer expert guidance on the best options for your situation. That way, you’ll know with certainty that you’re getting the best loan for your needs”.
Policy is needed to address rising cost pressures in housing
INFLATION figures released by the Australia Bureau of Statistics has confirmed rising cost pressures in housing with urgent policy action is needed, Master Builders Australia chief executive Denita Wawn says.
Inflation accelerated to 7.3 per cent during November, meaning that prices are now rising at their fastest pace since 1990.
“However, while monetary policy using interest rate rises is starting to show fruits in putting downward pressure on the demand side, more needs to be done to tackle the supply side bottlenecks relating to material, labour and housing supply," Ms Wawn said.
“We acknowledge that the RBA has a difficult balancing approach to take in curbing inflation, but at the same time, not getting too ahead of the realised impact of their decisions.
“However, the most sustainable solution to the inflationary problem lies on the supply side, through bringing down the cost of doing business. The requires issues like labour shortages, materials costs and the regulatory burden to be dealt with in a focussed and urgent manner."
Over the year to November, the cost of buying a newly-built home rose by 17.9 per cent.
“Housing continues to be the inflationary canary in the coal mine, with figures reflecting huge increases in the cost of building materials, as well as continued shortages of key construction trade workers,” Ms Wawn said.
Rents are also accelerating and are up to 3.6 per cent over the past year.
“Growing pressures in the rental market are being exacerbated by persistently low building volumes in the higher density part of the housing market.
“Labour shortages can best be addressed over the short and medium term by making it easier for migrants to work in Australia. "The bottlenecks in our migration system need to be addressed as a matter of priority.
“The continued ramping up of the regulatory burden on our industry is making it much more costly for building businesses to do their work, contributing to housing inflation."
