In a midst of a long cold winter in Melbourne, its housing market is so hot right now that it has overtaken Sydney as the country’s hottest housing market. Fueled by cheaper and more affordable housing prices, a large supply of greenfield land and strong employment growth, Melbourne and Victoria is attracting more interstate migrants than Sydney and New South Wales. Between June 2011 and June 2016, Victoria recorded a net interstate migration gain of 42,600, while New South Wales recorded the largest net loss of 57,300. Over the same period there was interstate movement of 126,700 persons moving from New South Wales to Victoria. The 2016 ABS census indicated that, while NSW remained the most populous state, it is not growing as quickly as other states. This is demonstrated by Melbourne's population of 4.4 million closing fast on Sydney's 4.8 million.
The first home buyer market was also higher in Victoria than in New South Wales. This might be related to the cost of new land and infrastructure in Melbourne’s growth areas being significantly lower than in Sydney. MacroPlan notes that current median house and unit prices in Melbourne are $710,000 and $529,000 respectively; while Sydney's median house and unit prices are $950,000 and $720,000.
This could also be related to the Victorian State Government’s recent budget concessions for first home buyers with the doubling of the first home buyers grant from $10,000 to $20,000 for regional buyers and the removal of stamp duty for first home buyers of properties up to $600,000.
It will be interesting to see whether this current trend continues moving forward noting that our Melbourne team continues to receive enquiries from interstate developers about opportunities in Melbourne.
We will watch this one with interest given MacroPlan’s experience in the property advisory and residential market assessments space.
If you would like to discuss opportunities to unlock your development potential in Victoria or Melbourne please contact Somma Sourivong, General Manager of Victoria on 03 9600 0500.