Property owners in Melbourne you can exhale slowly as there’s no immediate threat to the Melbourne property market. That said, the market isn’t flying either, as credit becomes tighter with more pressure than ever for banks to lend responsibly. This will keep pressure on potential buyers who will find it more difficult to access funds or to borrow as much as they could previously from lenders.
We noticed that Melbourne’s property cycle eased just before xmas last year, and has further slowed this year with three consecutive months of declines. Certainly all signals point to a flatter market instead of a crash – although there’s still growth on the horizon in some pockets – just go and visit some of Melbourne’s outer city areas where demand for land continues to outstrip supply. These areas will grow for some time to come with first home buyers leading the way. Melbourne still has a lot going for it with a strong economy which is one of the greatest factors for investors when considering where to invest.
But at the same time the more established and beach side suburbs could be entering a few years of stagnation with little to no growth, even a retraction in property prices. This is normal with any cycle and historically, the Melbourne property market runs 6 to 12 years between growth cycles.
With this in mind, when and where should you be looking to invest in Melbourne? Our advice is to target areas where the growth cycle is still in the early or middle stages. That’s exactly what good property investors do as they see the opportunities and anticipate the threats. And why they continue to make gains in all stages of the property cycle.