A Property blog by Paul Bennion.
Melbourne is set to continue as one of the strongest performing property markets in Australia due to its booming population growth rate.
ABS figures show that Melbourne recorded the biggest population growth rate of any capital city in Australia last financial year increasing by 2.1%.
This is not a once off because over the past ten years, Melbourne average population growth rate has also been 2.1% per annum.
In sheer people numbers, the population of Melbourne jumped by over 91,000 persons last financial year which represents an additional 1,750 people living in the city every week.
This surge in population has led to an upward pressure in property prices in Melbourne with house prices jumping by 8.3% over the past year to $713,000.
Over the last decade, the median price of a house in Melbourne has jumped by over $300,000 whereas is many other capital cities property prices have remained flat.
While the current residential building boom in the city is helping to moderate this price growth through greater supply, the outlook for the Melbourne property market still remains very positive for property investors.
In particular, the city is attracting large numbers of inter-state and overseas migrants because of the strong fundamentals underpinning its economy which is creating many new job opportunities.
This influx of people is set to continue and will create future demand for new homes.
DEPPRO has a dedicated office in Melbourne and it is finding that there is now strong interest from investors throughout Australian in this prime property market.
Currently, more than 20% of all tax depreciation reports our Melbourne office undertakes is for investors who live outside Victoria.
These astute property investors are buying for the long term and our office has found a surge in investor activity in key parts of the City following the publication of the State Governments long term planning strategy for Melbourne called “Plan Melbourne”.
Plan Melbourne has an objectives to achieve the delivery of 1,570, 000 new homes by 2051 of which 1,040,000 will be higher density and the remaining 530,000 will be traditional stand-alone houses.
This long term strategy means that there will be greater urban infill in the more established areas of Melbourne.
For example, Plan Melbourne has a target of identifying underutilised land surrounding train Stations such as North Richmond that can be redeveloped into new residential/commercial areas.
Property investors are now taking advantage of these growing opportunities in the Melbourne property market created by Plan Melbourne an as a result, our company is now undertaking tax depreciation reports for clients who have purchased established properties in near city areas that will lend themselves to future redevelopment.
Investors have also been very active in the Melbourne apartment sector which has offered a more affordable entry point into this booming property market.
The median price of a unit/apartment in Melbourne is now nearly $200,000 lower than the price of a traditional house.
Units and apartments now account for more than 50% of all tax depreciation reports our company undertakes for property investors in Melbourne.