Last year, is a tough and trying time to the city of Melbourne – one of the major cities that was most affected by the COVID-19. This outbreak causes a lot of Investors questioning the height of prices over the next 12 months.
Looking forward to this year’s economic status, the majority of experts/economist has predicted that it will raise up to 6% despite the effect and overall economic slowdown from a series of extended lockdown periods.
According to O’Brien Real Estate director Dean O’Brien, The SQM Research managing director Louis Christopher is now expecting prices to jump by 2% to 6% in Melbourne and NAB’s Andy Kerr is forecasting property price growth upwards of 5% in each of the next two years nationally.
Also, the upward trend seen from COVID restrictions that causes price growth is more likely to happen again in the first half of 2021.
According to Mr O’Brien, these are the growth factors to consider:
- Consumer sentiment
- Strong buyer activity
- Economic stability
- Housing supply improvement
Based on real estate directors all over the suburbs of Melbourne here is the list of suburbs that is expected to progress in 2021:
- Watsonia North & Coburg North
- Bentleigh East
- West Footscray
- Dandenong foothills
- Bayside region
- Kingston region
- Glen Eira region
The Melbourne market is projected to experience a chronic undersupply resulting in higher land values, yet unit oversupply increasing both serviceability risk and its equity.
Last September 2020, Melbourne’s home buyers were having favourable market conditions where the volumes and auction clearance rates are low but as the time goes by it had a sharp increase on buyer sentiments and auction clearance rates.
Melbourne is projected to have 8% to 12% price growth in 2021. However, in the inner Melbourne whereas the high supply of rental apartments are still at high risk with both equity and cash flow risk increasing materially.