Melbourne house prices set for nation's most severe fall: CoreLogic-Moody's Home Value Index Forecast
Melbourne's property market is predicted to fall between 2018 and 2020 due to the recent prices rises and a high level of incoming supply, according to the CoreLogic-Moody’s Analytics Australian Home Value Index Forecast.
The forecast said dwelling values nationwide are forecast to rise 7.9 percent this year and 6.6 percent in 2017, mostly driven by continued gains in Sydney.
Perth and Darwin remain troublesome during 2017, but then Melbourne's property market is set for mild falls across houses rather than its apartment market.
"In Melbourne, property market observers are bracing for a coming wave of apartments. Yet the segment to watch in the city’s real estate market is arguably detached housing, not apartments. House values in Melbourne have increased 47 percent over the past four years, while apartment values have risen a relatively muted 23 percent," the report said.
"That difference in value growth was not driven by yields: Over the same period, rents from housing rose 14.3 percent, while rents for apartments rose a not-too-dissimilar 10 percent. And rents for apartments across Melbourne are still rising modestly—up 1.3 percent since January—while rents for detached housing have fallen 2.5 percent.
"With Melbourne, it is possible that wide- spread expectations of the coming supply of apartments have dampened value growth, and so the increased supply may, in a sense, be already ‘priced in’. For this reason, the oncoming supply of new apartments is likely to result in a period of at prices, forecast to be little changed through to 2019.
"However, detached housing values are expected to grow a steady 11 percent for all of 2016 before slowing and eventually declining 1.8 percent in 2018."
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