For quite some time now, it has looked as though housing prices in Australia would continue to rise with no end in sight. Up and up they went – while investors sat by sipping their martinis and first home buyers paced up and down biting their nails.
Well, hold onto your hats people because tables are beginning to turn and it would seem as though these times have come to an end. For the moment at least. No longer is it all sunshine and rainbows for the growth of Australia’s housing industry, and it would seem that Melbourne is at the top of the list of capital cities feeling the brunt of this.
The data is in
An analysis performed by investment bank Morgan Stanley has unveiled that in the past few months, Melbourne has seen a 1.2% decrease in the cost of residential houses, and has just overtaken Sydney as the most poorly performing capital for housing prices.
Basically, Melbourne now takes the cake for the fastest decline in housing prices of any capital across the country.
This is quite a dramatic turn around from the seemingly impenetrable stronghold that was Australia’s housing industry not but 6 months prior. To begin with, Melbourne started out strong and was fighting off the decline in housing prices tooth and nail, and had initially been in good stead. Things took a turn for the worse however in the past three months, and the deeper you go, the worse it looks… the statistics bare all – and they do not look pretty.
According to CoreLogic’s more recent evaluation that was brought out at the start of this month, it shows that across the city, housing prices have been hit the worst with apartment prices remaining far better off.
Having said that, however, the numbers also show that the price of units across every second suburb and throughout Melbourne’s inner city have been falling since the beginning of this year, whilst South of the Yarra is currently at the heart of these declining figures. Prahran and Port Melbourne recorded the biggest decline with a tumble of over 18%, followed closely by St Kilda East, Carnegie, Southbank and South Yarra.
This might look rather bleak, but despite what it seems, not all of Melbourne has been suffering. While the biggest blows for apartment prices seem to be concentrated towards to the centre, the price of units within Melbourne’s outer suburbs have actually been increasing, with every 4 out of 5 suburbs showing that prices are continuing to go up at an unstoppable rate.
Yet despite this small piece of good news, it is still being vastly overshadowed by the undeniable figures that paint the Melbourne housing market in an extremely unflattering light. The idea of investing in property within Melbourne has now become rather unpopular, with statistics showing that Melburnians are becoming somewhat cynical and discouraged about the idea of investing in property in their own city. Given the numbers, it really isn’t difficult to see why…
But let’s just hold up for a second. Yes, the housing prices are falling across the majority of major capitals nationwide, and yes, Melbourne does appear to be seeing the worst of it. Nevertheless, doom and gloom aside, the price of both apartments and houses in many of Melbourne’s outer suburbs continue to stay strong and are not expected to take such a heavy hit in the future.
Finally, just so we so can be sure to end on a good note, let’s just put something into perspective: even despite the pessimism surrounding the decline in the property market across Australia’s major capital cities, the average price of housing in Melbourne is still up to twice the price of houses in New York.
So don’t worry everyone. We really are still living in the lucky country.