20 Edro Ave, Brighton East passed in at auction at $3.375 million in October. It’s still up for sale.
MELBOURNE home values have shed 4.5 per cent since the market peaked almost a year ago — and they could fall another 10 per cent before the downturn is done.
This is the verdict of property data firm CoreLogic’s senior research analyst Cameron Kusher, who tipped the city’s housing market decline to continue “well into next year”.
“It looks pretty ingrained,” he said.
“(Melbourne and Sydney) will fall from their peaks by 10-15 per cent, and then it’s going to be a long road to recovery.”
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Melbourne auction clearance rates have fallen below 50 per cent in the past fortnight. Picture: Mike Dugdale
Melbourne home values — taking into account both houses and units — dropped another 0.7 per cent in the first 29 days of October, preliminary CoreLogic data shows.
The figure has now decreased for 11 straight months, accumulating to a 4.5 per cent decline since last November. The city’s median dwelling value was $697,457 at the end of September.
CoreLogic’s latest Hedonic Home Value Index, to be released on Thursday, is also expected to reflect October falls in Sydney (down 0.7 per cent in the first 29 days of the month) and Perth (0.8 per cent), with Brisbane to be unchanged and Adelaide to notch a slight rise (0.2 per cent).
Mr Kusher said Melbourne’s outlook wasn’t all doom and gloom, with the affordable end of the market generally defying the cool down in contrast to the weak top-end.
A fall had also been “overdue”, after “astronomical” property price gains coupled with subdued wage growth had slashed affordability in recent years.
27 Richardson St, Essendon remains up for grabs with a $3-$3.3 million price guide after passing in at auction.
Mr Kusher also put the correction down to the fact there was “more stock on the market than there’s been for a number of years”, creating more supply to meet demand, and lending restrictions had made credit harder to access.
“For people who don’t own a home, it’s good news because you’ve got a chance to get into the market,” he said.
“You’re paying less now (for a home) than you were 12 months ago.”
He said Melburnians who bought their homes several years ago had no reason to panic, as they would still be “worth a lot more than what you paid for it”. But homeowners who purchased within the past 12-18 months would likely have lost some value.
Real Estate Institute of Victoria senior vice president Leah Calnan said the Melbourne market was cyclical, meaning while there may be slumps, property values generally increased in the long-term.
“Victorian property continues to be a sound investment,” she said.
Real Estate Buyer’s Agents Association president Rich Harvey said with Victoria’s market correction and tighter lending conditions generally putting pressure on vendors, now was “an
ideal time to get a good deal in the property market”.