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Article by: Terry Ryder

We called it in October 2015 and Melbourne has delivered. As forecast by Hotspotting, Melbourne has zoomed past Sydney to become the No.1 city on price growth.

It’s the first time in three years that Sydney has been knocked off its perch.SSUCv3H4sIAAAAAAAEAJ1SPW/CMBDdkfgPUWaUxny0pRt7K3VpF8RwcQ6wSGLku4AqlP9eJyHljJg6WPJ7d/f8LnmX8SiK4gzI6PgturTIY1MUNbEDNrbydDq58pgbts5A0ZIt13SVmBi4JiQhoaYzt/V4NsxmZkds9eG4t2xlIcejJcMdT0HBIZTEpkTJbn1bYUBSJ0Qnsfbmbbnlo/KsEj41MO78AoHTYfl1j6Oh0EsB+1IcTwRHddZxA9VM/j3ZXzaDcdhhpX9u3oJ110JIpanyJ1Eq0F+k6dyfRbJcLP8e2fx1hF9U6j2ngc7L9NH0/R+UAp8FaKTky2VQBVIrp/eGUXPtMHmHKi/BHejpw1Z1iRVT0HxVWWGbMYq+DZ7p4R53kZFO5rNA8vU2318akQeHBUKf23UvHx/OjK7s8nFtOpkcrcBQ58aK/Jys9mbb/MmkdRHspsaj5hfuv5XzZgMAAA==

But the change at the top was predictable. The Sydney market peaked a long time ago while Melbourne still has good momentum.
Melbourne’s stellar property market is supported by key factors: the underlying economy, strong business confidence and nation-leading population growth.
Victoria is now the state that gains the most from interstate migration.
Victoria was one of only two states that gained from net interstate migration (up 10,190) in 2015. It’s been gaining from cross-border migration since 2009. Melbourne is also the city that gains the most from overseas migrants.
The business sector is strong as well. The latest data shows that 21,000 new small businesses started operating across Australia last year, headed by Victoria where 8,600 new ventures opened.
This means Victoria provided over 40% of new businesses in 2015. Peter Strong of the Council of Small Business in Australia says this reflects a high level of confidence in the community.

 

So what does this mean to you as a real estate investor?
Melbourne has the greatest number of growth markets anywhere in Australia. Brisbane and South-east Queensland is challenging, but Melbourne remains on top.
The greatest impetus in Melbourne is found in the middle-market areas and cheaper outlying suburbs. The outer-ring precincts favoured by first-home buyers and investors on a budget are really pumping.

Original article by: CoreLogic 

Moody’s Analytics, a leader in risk measurement and management, and CoreLogic, Australia’s leading property data, analytics and market insights company, forecast that home value growth will likely slow across Australia in 2016, following two years of exceptional home value appreciation and double-digit growth in many areas.Screenshot 2016-03-01 12.25.04

This forecast is based on the new CoreLogic-Moody’s Analytics Australian Forecast Home Value Index, launched today, which provides a quarterly projection of the trend of residential home values across the country over the next 10 years. Forecasts are updated monthly to help market participants identify opportunities and manage risk exposures.

“We are excited to partner with Moody’s Analytics to launch this Forecast Index to provide a unique and critical perspective on Australia’s most valuable asset class, currently valued in excess of $6.4 trillion AUD,” said Craig Mackenzie, CoreLogic EGM, Banking & Finance.

“On the outlook for the housing market nationally, we expect house price appreciation to slow in 2016. Our forecast reflects lower income growth as the Australian economy transitions away from mining-related investment, as well as the strong build-up of housing supply over the past two years,” said Alaistair Chan, a Sydney-based economist based at Moody’s Analytics.

“Nevertheless, accommodative policy, robust rental growth, and a recovering labour market are expected to support valuations over the medium term,” adds Chan. The CoreLogic-Moody’s Analytics Australian Forecast Home Value Index currently includes forecasts at a capital city and rest-of-state level.

“Conditions in Melbourne are again expected to outperform Sydney this year, with values forecast to rise by 7.2% in 2016, before slipping back to just 1.3% growth in 2017,” said CoreLogic research director Tim Lawless.

While the pace of house price appreciation is forecast to slow in Sydney, Melbourne and Darwin this year, there is expected to be some pick-up in growth in the remaining capital cities. Hobart, in particular, stands out for better price growth.

For more information about the CoreLogic-Moody’s Analytics Australian Forecast Home Value Index, please visit: www.economy.com/australia-home-value-forecast or www.corelogic.com.au.

 

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