Melbourne: Australia's Most Affordable Major City Housing Market
Melbourne: Australia's Most Affordable Major City Housing Market
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Recent data from PropTrack highlights Melbourne as the most affordable major capital city in Australia for housing, as it continues to record the slowest dwelling value growth compared to other state capitals.
Over the year leading up to August, Melbourne's property prices increased by merely 2.1%, starkly overshadowed by the growth rates in cities like Sydney, Brisbane, Perth, and Adelaide.
Since the onset of the COVID-19 pandemic in March 2020, Melbourne's dwelling values have shown a modest 20% increase. In contrast, increases elsewhere in Australia include 42% in Sydney, 96% in Brisbane, and over 90% in both Perth and Adelaide. Consequently, Melbourne's median dwelling value now stands at $830,000, making it the most affordable among Australia's five major capitals, and significantly lower than the combined average.
This affordability is a contrast to Melbourne housing trends over the last two decades. However, experts forecast a potential shift. KPMG predicts robust price growth for Melbourne, expecting it to outpace the national average in 2026 with an anticipated growth rate of 6.6%, driven by escalating interest from savvy investors.
The city is attracting high-income investors beyond its borders, particularly from Western Australia. Buyer advocate Arin Russell notes that both first-time buyers and seasoned investors are seeking opportunities in Melbourne, keen to invest before an expected market upswing.
Despite the economic challenges facing Victoria, including significant state debt and rising crime in Melbourne, the city's current affordability presents a unique opportunity for buyers. As KPMG's chief economist Brendan Rynne suggests, the unit market might see the most considerable gains due to its favourable affordability.
As Melbourne prepares to potentially lead the national housing price growth, its current market presents an attractive proposition for bargain hunters eyeing considerable returns in the near future.
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