With investors absorbing the changes that APRA has made to lending, there’s never been a better time to dive back into the property market with the help of a Buyers Advocate.
But with overseas investors becoming a convenient target, and hot media issue for driving capital growth – it’s important to look back, as well as forward before we point the finger of fear and blame. History would tell us with some certainty that property growth has been driven by supply and demand. Put simply, where there is scarcity, the price of property will be driven upwards.
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So what does history tell us?
A recent article by Marika Dobbin demonstrated a very different time in the Melbourne property market – and clear evidence that supply and demand have been the primary drivers for Melbourne’s property growth.
If you had about $30,000 in 1975, you could have bought a house in almost any Melbourne suburb. A house in Balwyn ($34,000) cost much the same as a house in Bundoora ($33,750). A house in Hawthorn East cost the same as one in Frankston North.*
As a case in point, let’s look at a Victorian house in Middle Park. 40 years ago, a home there would have cost approx. $30,550. Today, prices hover around $2.2million. That’s a 7000% growth factor, and all without a foreign investor in sight.*
Ironically, Hoppers Crossing cost marginally more in 1975 than Middle Park – but its growth has dragged along to a median of only $375,000.*
Similarly, in 1975 you could buy a house in Melton for $30,000 and in Richmond for just $22,000 – but today, Melton’s median house price is just $250,000, whilst Richmond’s is $1million.*
So why has there been such slow growth in Hoppers Crossing and Melton? Quite simply, on the outskirts of the city they sat close to growth corridor’s that met the supply and demand for housing in those areas.
Now IS the time to invest.
The last 20 years has typically seen investors fall away in a buyer’s market – but this is actually a great time to buy property.
With the Melbourne market coming off the “boil”, there are lots of fantastic purchasing opportunities out there for the astute investor. In a softening market, vendors become much more realistic with their reserves and expectations.
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The inner Eastern suburbs, high demand ‘school zone’ suburbs and generally any suburb within 10kms of the Melbourne CBD will continue to perform well.
Looking to invest in 2016?
Our team of experienced Buyers Agents can assist you to find the best investment property for your needs and budget. The key to property investment success lies in making informed decisions based on solid data – speak to one of our expert Buyers Agents about the best places in Australia to invest today on (03) 9645 3418.
* “Where did you land in property roulette?” by Marika Dobbin, The Age, 12.12.15