Investment Property Market Insights To Know Before You Start Investing

July 27, 2023

Curious about the future of the Melbourne property market beyond 2023?

Investing in properties has long been an exciting avenue for wealth creation and financial security.

As we delve into the intricate landscape of investment properties, we’ll offer you detailed data insights to navigate this dynamic market with confidence.

Still, sounds overwhelming? Well, you can always hire experienced buyer’s agents to help you out in your property investment journey.

From Property Research Australia to negotiation and beyond, you will find comprehensive investment solutions.

The recovering property market in Melbourne

Melbourne’s housing market has encountered various challenges in recent years.

These include the economic repercussions of the COVID-19 pandemic, extended lockdowns, multiple interest rate increases, low consumer confidence, negative media coverage, and tightening lending restrictions.

As a result, Melbourne property values experienced a decline of 9.1% from their peak in February 2022 after a period of growth in 2020 and 2021, which saw a cumulative increase of 17.3%.

Current Market Outlook

According to Corelogic’s daily home value index, Melbourne house prices saw a 0.7% increase in June 2023.
Proptrack also reports a 0.2% rise in Melbourne home prices in June, bringing them 0.8% higher than their January low.
Additionally, Dr. Andrew Wilson’s My Housing Market data shows a 0.7% increase in Melbourne house prices and a 0.6% rise in unit prices for June.

Need more detailed Real Estate Investment Analysis before you start your investment journey? Connect with a professional buyer’s agent.

What does the future hold?

With five consecutive months of median property price increases, Melbourne appears to have passed the bottom of the market downturn.

While Melbourne’s price recovery this year may not be as rapid as Sydney’s, it also did not experience as significant a decline in 2022.

It’s important to note that reaching the market bottom is a gradual process, as different sub-markets within Melbourne may exhibit variations. Despite potential obstacles, most experts now anticipate further price recovery in the Melbourne property market.

Additionally, a noteworthy fact to consider is that the Melbourne property market has stood tall as one of the strongest and most unwavering performers over the course of the last four decades.

Real Estate Investment Analysis- Statewide Market Update- June

According to the latest Real Estate Investment Analysis report from CoreLogic, the following is a breakdown of the recent property price movements in major Australian cities:

Sydney property prices rose by 0.5% in the past week, marking a 1.5% increase over the last 28 days. Year-to-date, they have gone up by 4.9%. However, they still remain 5.8% lower than they were a year ago.
Melbourne property prices saw a 0.2% increase in the past week and a 0.7% rise over the last 28 days. Year-to-date, there has been a modest increase of 0.7%. Nevertheless, compared to twelve months ago, they are still 6% lower.
Brisbane property prices experienced a 0.3% increase in the past week and a more significant 1.2% rise over the last 28 days. Year-to-date, they have gone up by 1.1%. However, compared to twelve months ago, they remain 8.66% lower.

Taking an overall view, Australian capital dwelling prices recorded a positive movement, with a 1.2% increase over the past 28 days.

However, looking at the broader picture through, they are still 5.1% lower than they were twelve months ago. In essence, these figures indicate that there is still good value to be found in Australian housing markets.

Property Research Australia Finds Increase in property rents

Exciting news on the rental front! More than 40% of the house and unit markets in Australia are experiencing some serious rent hikes.

CoreLogic’s digital tool, Mapping the Market, did some Property Research Australia and uncovered a fascinating stat: around 1,700 suburbs, which accounts for a whopping 44.4%, have witnessed rental increases of 10% or even more between May of last year and May of this year.

That’s a significant jump!

So, what’s causing this rental increase? Well, low vacancy rates and robust demand for rental properties are the pivotal factors.

These factors have triggered a surge in rent prices, with certain suburbs witnessing mind-boggling increases of over 30% in just the past year alone, according to the trusty folks at PropTrack. It’s a competitive market out there!

PropTrack’s Property Research Australia also highlighted the top suburbs with the most significant annual growth in advertised rents for properties. These locations include:

Rose Bay (Greater Sydney, +38%),
Collaroy Plateau (Greater Sydney, +30%),
New Farm (Greater Sydney, +29%),
Londonderry (Greater Sydney, +29%),
Melbourne (Greater Melbourne, +38%),
Aberfeldie (Greater Melbourne, +33%),
Southbank (Greater Melbourne, +32%),
West Melbourne (Greater Melbourne, +30%)
Zetland (Greater Sydney, +31%),
Matraville (Greater Sydney, +30%),
Docklands (Greater Melbourne, +29%)
Millers Point (Greater Sydney), +29%).

PropTrack’s Property Research Australia also found demand for rentals in the capital cities has significantly increased over the past two years, with the number of potential renters per listing increasing by 40% since May 2021.

All in all, the rental landscape in Australia is buzzing with activity.

So, if you’re on the hunt for a place to call home or considering an investment property, now’s the time to get in the game and ride the wave of these exciting rental developments.

Wrapping Up

The investment property market holds a world of opportunities for interested investors. By staying informed, analysing market trends, and making strategic choices, you can unlock the potential for financial growth and long-term wealth creation.

Whether you’re entering the market or expanding your portfolio, remember that knowledge is power.

Armed with valuable insights from this blog, you are now well-equipped to navigate the investment property landscape with confidence and seize the opportunities that await.

Also, don’t forget a customised professional consultation and Real Estate Investment Analysis from an experienced buyer’s agent before starting your property investment endeavour.

Here’s to a prosperous future in the world of investment properties!