High supply pipeline could drive Melbourne property market slump: CoreLogic-Moody’s Analytics
Melbourne’s property market is nearing a peak and could be entering a slump because of high incoming supply according to the latest CoreLogic-Moody’s Analytics Australia Home Value Index Forecast, 2016Q2.
The forecast said momentum in Australia’s housing market has been sustained, with the CoreLogic Home Value Index rising 1.7 percent in May however predicted a 6 percent decline inMelbourne house values from the end of 2016 through to early 2020.
"Despite expectations of steady income and jobs growth in Melbourne, house values are forecast to decline more than 6% from the end of 2016 through to early 2020. How- ever, the declines are likely to be con ned mostly to apartments in comparison with detached dwellings," the report said.
"House values in Melbourne also reached a new high in April, but the outlook here is less positive. The current momentum will enable values to gain 7.1 percent this year, but the effects of high levels of incoming supply—200,000 dwellings approved for construction from 2013 to 2015—will depress house values through to 2020.
"Price growth in Melbourne and Sydney, after a period of deceleration, picked up again in April and May, and signs of a recovery are evident in Brisbane and Perth. However, the markets in Adelaide and Darwin are sluggish and are expected to underperform.
"House values nationwide are expected to rise 6 percent this year and 4.1 percent in 2017. Much of this rise will be driven by continued gains in Sydney, where values are forecast to rise 7.3 percent this year, or about half the 14.9 percent rise in 2015."
