How is Melbourne property faring during the COVID-19 lockdown?

“Latest statistics show that Melbourne housing values have dropped 1.1 per cent, the numbers of owner-occupiers had increased in demand by 0.5 percent and demand from investors has dropped by 0.3 per cent,” the report stated.

“Melbourne CBD high-rise apartments in the city and fringe areas will suffer the largest price fall as a result of the coronavirus.” 

The past few months have also impacted the rental market as high rates of unemployment have led to many young people exiting the rental market and moving back in with parents, downsizing or sharing rentals to save money. 

This has greatly reduced housing demand, which has caused a spike in vacancy rates, leaving investors nervous about what’s to come. 

Melbourne is also facing the headwind of locked borders, which has seen immigration coming to a halt as well as a sharp decline in international students – investors will be feeling the pain over the next 12 to 24 months.

However, areas away from the CBD itself appear to have stronger value for investors as Melbourne residents adapt to the new norm of working from home.

“Investors looking to also take advantage in this climate are predominantly looking for well-presented older properties in established areas,” the report noted.

The report found that first home buyers could potentially get on the market in the Inner South East and Inner and Outer North in particular.

“First home buyers [in the Outer South East] with job security are leading the way as confidence is returning to the Victorian property market, as individuals are motivated by affordability and the flexibility a house and build can bring them,” the report said.

“The newer suburbs within the City of Casey and Cardinia are mainly driven by first home buyers looking to take advantage of the current economic conditions to purchase properties with the help of government grants such as the First Home Owner’s Grant, where a $10,000 grant is available to those looking to buy or build their first home for less than $750,000.”