Melbourne property market update. As we have indicated before, we did not expect The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to have significant impact on Melbourne property prices. We also indicated that Melbourne dwelling prices are expecting to mirror Sydney albeit with a time lag. We believe we have been spot on with most of our expectations.
June 2019 Melbourne property market overview
May has shown that Melbourne property prices have continued to decline. However, also as we have estimated before, the pace of the decline has moderated. As shown in the graph below there has been flat lining. However, as Melbourne usually lags Sydney, we expect the decline to continue, albeit moderately.
Melbourne property prices have declined -0.3% over the month and this brings us to a decline of 1.7% over the quarter. The annual decline for Melbourne property market is almost 10% so far. Median house prices in Melbourne are now a touch over $600,000.
Will Melbourne property prices increase?
If RBA does proceed with cutting interest rates, we can expect interesting times ahead for property market. Especially so that yields in Melbourne remain compressed. Melbourne remains affordable, compared to Sydney. With interest rates falling, this might provide support to property prices in the city. We don’t expect recovery in this year yet. As indicated before, we expect Melbourne price falls to moderate towards the end of 2019 and head sideways for a few years afterwards. We will remain observant of this market. If the federal government enacts policies to revive the property market in Melbourne we will endeavour to update.
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