The property market has seen strong growth over the first half of the year coming off one of the most unusual years we have seen. Lockdowns and border closures forced a year of record savings for Australians coupled with record low properties on the market in 2020, government stimulus and the Reserve Bank slashing interest rates created the perfect recipe for price growth over the first two quarters of the calendar year.
However, not all the growth was evenly distributed throughout our city. Take a look at the data from REA showing the price growth of units in South Yarra. With vacancy rates for units in and around Melbourne CBD in 2020 at record high and rental yield decreasing, units in these areas weren’t seen as the bluechip investment product that they once were over 2020.
However, in the first have of 2021 interest in the demand for units in South Yarra grew by 7% most likely due to a “back to normal” way of living for most of the first few months of the year bringing back some optimism to the market.
Data revealing the suburbs with the biggest growth in average estimated value for both houses and units across capital city regions, shows scenic suburbs further away from CBDs have experienced the biggest jumps in the first half of 2021.
Looking at the suburbs with the biggest growth in average estimated house value in Melbourne, Shoreham on the Mornington Peninsula saw the biggest price growth for the first half of the year at 44%. Suburbs that saw the highest growth were usually those within about an hour-and-a-half from the city and they’ve got good transport infrastructure, but most are along the coast or in scenic areas.
Most in demand
Melbourne’s Brighton, known for its large waterfront homes was the most popular suburb for serious house buyers in that city, with 275,746 highly engaged buyers looking in that suburb in the first half of 2021.
The unit market was still dominated by Melbourne CBD, South Yarra and Southbank, with many investors looking for bargains brought on by a drop in prices in those areas for most of 2020.
Rental vacancies are still very high in these areas however from an astute investors point of view there could be great opportunityies since eventually, international students will return, overseas migration will resume and people coming into Australia tend to like to live in central locations.
Number of highly engaged buyer per suburb below;
Growth in demand
While many of the most in-demand suburbs for house buyers have strong aesthetic qualities such as beautiful homes, tree-lined streets and water views, the suburbs with the biggest growth in demand tell a slightly different story.
Essendon West in the northwest recorded a 132% jump in demand in the first six months of 2021 compared to the previous six months. These middle ring suburbs provide you with the best of both worlds, space, large homes, public transport, amenity while still being close to the CBD. If you think about where families want to live, they don’t want to be in the middle of nowhere. They want to be somewhere with good access to schools and shopping centres and things like that.
Days on Market
Record low supply coupled with strong buyer demand across most of the city is not only pushing up property prices, but also shortening the amount of time a property stays on the market.
In some suburbs, houses are spending just days on market before being snapped up, according to data from realestate.com.au. Houses in the Melbourne suburb of Sky stayed on market for a median of nine days in the first half of 2021, making it the suburb with the shortest days on market in that city.
We expect in the next few weeks is a lull in the property market because we are still in lockdown and it’s not an attractive time to bring a property to the market for many sellers.
What we are likely to is people who would have otherwise were going to bring their property on the market to sell in winter will hold off for a little while. And what that’s going to do is probably increase the volume of properties coming for sale during the spring season.
If you would like to keep up to date with the market in our area, feel free to give any one of our agents a call.