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She said migration trends were less favourable for Melbourne because interstate migration was weak during the lockdown, with arrivals down by about 35,000 in the year to June 2021. Newcomers from overseas made up for the losses but were initially more likely to rent rather than buy.
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She pointed to several stress factors, such as an increase in the number of homes for sale. Markets in the west and northwestern suburbs remain sluggish.
“You might infer that in a high interest rate (environment) people are selling because they can’t handle the mortgage very well.”
She believes that the increase in Victorian land taxes has not boosted investor demand. At the beginning of the pandemic, Victorian real estate investment loans accounted for about one-third of the total, which had already fallen before the land tax was expanded and has now fallen to about 20%. Despite the increase in rents, Mortgage costs rising faster.
Victoria, on the other hand, accounts for about 35 per cent of first-home buyer lending, the highest of the states.
SQM Research managing director Louis Christopher said Melbourne’s housing market had been stagnant and volatile so far this year.
Some markets in Melbourne are hotter than others.Credit: Wayne Taylor
Mr Christopher said Victoria had a greater net outflow of interstate residents than other states, while higher property taxes also discouraged investors.
“Listings will certainly increase in Melbourne in 2024. We are above the long-term average,” he said.
“It could be that investors are exiting the market, looking for other options, or simply looking to cash out as interest rates rise.”
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Barry Plant chief executive Lisa Pennell said Melbourne’s house price growth had been more modest than in other states, providing opportunities for first-home buyers.
“We’re starting to see more first-home buyer activity,” she said. “Rental properties are hard to find right now and they’re expensive, which for a lot of potential buyers is going to push them to buy.”
But she said higher land taxes were a problem for investors, with more selling than buying.
“That’s put real pressure on leasing in terms of both price and supply,” she said.
Point Cook homeowner Robert Stojanovski and his wife Danielle Decided to sell their house For nearly 14 years, they have been working to relocate their family closer to their daughter’s school.
Robert and Danielle Stojanovski and daughters Chantel, Monique and Charlotte are selling their home.Credit: Joe Amao
“We hadn’t decided to sell until one of our neighbours sold their property last August, and the price was very high,” he said. “When they sold it for a high price, we started to think whether it was a good time to sell.”
“I still think it’s a good time and there’s still a lot of volatility in the market.”
Stojanovski’s agent, Ray White Point Cook principal Amar Thakkar, said his western district has seen neither positive nor negative trends over the past six months.
“We’re still seeing a lot of groups coming through and the average bidder is still relatively healthy, but there’s a bit of an issue with price expectations,” he said. “Buyers don’t have the confidence to bid as high as the sellers would like.”
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