Newspaper article The Northern Star (Lismore, Australia)

Melbourne Market Overview; City Attracting More and More Investors and Young Family Buyers from Sydney

Newspaper article The Northern Star (Lismore, Australia)

Melbourne Market Overview; City Attracting More and More Investors and Young Family Buyers from Sydney

Article excerpt

IN last week's column we covered what's happening on the ground in Brisbane, as reported in our recently released annual McGrath Report.

This week, let's look south to Melbourne which, like Brisbane, is attracting an increasing number of investors and young family buyers from Sydney following several years of extraordinary price growth in their home city.

The Melbourne market has shown ongoing strength in 2015, with the median house price rising above $700,000 for the first time. Figures from the Real Estate Institute of Victoria (REIV) show house values rose by 5% to $706,000 in the June quarter, while auction clearance rates reached a five year high for the month of June at 78%.

Properties have also been selling in record time. REIV data released for the September quarter shows the median days on market is now 34 - five days shorter than in 2014.

Record low interest rates and unprecedented interstate and overseas migration and investment are combining to fuel the Melbourne market. Victoria's population has increased by more than 100,000 people over the past 12 months, with net interstate migration at its highest level in 40 years and net overseas migration accounting for half the state's growth, according to the ABS.

The declining Australian dollar is making local real estate even more attractive to an already active overseas investor market, with remarkably high sale prices for prestige homes and off-the-plan projects recorded this year, mostly in the eastern suburbs.

Victoria remains the most popular destination among wealthy foreigners using the Significant Investor Visa; and Credit Suisse estimates 14% of new apartments are being purchased by Chinese investors alone.

In July, the Victorian Government increased stamp duty for foreign purchasers by 3% in response to community concern. To enforce the new law, all home buyers must now complete the Duties Form 62 Purchaser Statement declaring whether they are a local or overseas purchaser. …

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