Across Australia, all residential markets are feeling the effect of tight lending conditions, mainly for investors. Demand indicators are worsening and prices are declining further over 4Q2018, even in previously strong performing suburbs and the premium market. Despite price falls in the housing market, economic conditions remain strong. Victorian population, retail spending and employment growth continue to outpace national trends.
Here are points highlighted in the report: -
• Investors’ sentiment has softened as Melbourne residential property becomes increasingly difficult to sell.
• Annual sales volume for houses and units (new and existing) fell 14.5% and 34.1% respectively over the 12-months period
• Greater Melbourne rental vacancy increased slightly from 2.1% in January 2018 to 2.2% in January 2019. Inner Melbourne vacancy has also increased from 1.9% to 2.1% reflecting increased pressures from strong supply in this area
• Rental yields marginally increased 1 bps for houses to 2.9% and remained stable at 4.0% for units over the quarter. Yields are likely to rise largely on the back of price declines.
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