It’s all doom and gloom at the moment in the property market no matter what your news source. We’re in for ‘an economic crash’, ‘a debt bomb’, ‘a credit crunch’ or our recent favourite “Bricks and Slaughter”. Interest only loans resetting will see people having to sell and flood the market with unsaleable housing stock – phew!
We’ve been in this game a long time and see the market cycle regularly. In just the last decade we’ve seen two housing market slumps; 2008 after the GFC and again in 2010.
Melbourne housing market – over the long term
If you look back over the last 55+ years though, you’ll see there’s been a number of instances where the housing market saw pricing corrections. The trend we want to bring to your attention is this: throughout all of these contractions, the median house price (adjusted for inflation) has always continued in an upward trajectory over the long term. This is the blue line in the below graph. Yes, there are dips but none of these have occurred for a sustained period of time.
Source: Business Insider
What this demonstrates is, that despite regular and ongoing changes to the pricing of stock on the market, quality property continues to increase in value over time.
We grabbed some data from Core Logic on suburbs that have had the most consistent growth over the last 5 years, along with some stats from REIV on which suburbs had the best growth from Jan – June 2018.
We ALWAYS recommend you get expert advice before taking the plunge and buying property. Even within these Melbourne growth suburbs there are properties that aren’t going to perform as well as others (see our previous article about Richmond on this topic).
Top 10 most consistent Melbourne growth suburbs (last 5 years):
- Wallen (houses) saw 63.1% growth
- Hastings (units) saw 43% growth
- Cockatoo (houses) saw 71.5% growth
- Coolaroo (houses) saw 66.7%
- Melton (houses) saw 69.5% growth
- Crib Point (houses) saw 67.6% growth
- Rosebud (units) saw 48.9% growth
- Box Hill (houses) saw 103.8% growth
- Dallas (houses) saw 63.9% growth
- Hastings (houses) saw 62.1% growth
Source: Core Logic
And the top high performing Melbourne growth suburbs June 18 quarter:
Source: REIV, High Performers
We firmly believe that no matter what’s going on in the market, if you’re buying quality property with good advice from a property expert, it’s hard to go wrong.
The biggest thing you’ll need to consider in the short term is your finances with lending criteria being tightened. Make sure your finances are in tip top shape including good savings habits and repayment conduct on any debts. Ideally, when buying property it’s for the long term as it’s expensive to transact in and out of and this will ensure you best chance of success if held for a full property cycle.
Book a Discovery Chat with one of our expert brokers today to chat finance strategy if you’re in the market for a new home or investment.