Melbourne market holding up better than most during Covid-19: Hotspotting's Terry Ryder
EXPERT OBSERVER
Melbourne markets have held up better than most against the forces of Covid-19. The number of growth markets has dropped but it remains at solid levels – and prices have continued to perform well, in defiance of predictions (by the usual suspects) of a collapse.
The latest quarterly survey of sales activity by Hotspotting has found fewer growth suburbs than the previous survey, but still better than all other quarters since the Melbourne market peak in 2017.
This tells us that the Melbourne market has dropped in terms of sales activity, thanks to the restrictions imposed for the coronavirus, but remained stronger than during the post-boom downturn phase that extended throughout 2018 and early 2019.
Melbourne has done particularly well with price performance – with houses coming back strongly in the most recent quarter, but with apartments doing better than houses in annual terms.
In the past 12 months, two-thirds of Melbourne suburbs with apartment markets recorded growth in their median unit prices – and most of those growth suburbs increased their median prices by more than 5%.
House markets were less positive in annual terms, with only one-third recording price growth over the past months.
But the situation with house prices is starkly different when looking at the most recent data: 88% of Melbourne suburbs recorded growth in their median house prices in the most recent quarter.
This reflects the overall trend in the market. In the first half of 2019, Melbourne prices generally were falling, following the end of the previous boom and impacted also by the lead-up to the Federal Election.
Markets started to recover in the second half of 2019 and the early months of 2020 – so that most suburbs were recording price growth in their housing markets, but two-thirds still remained below the levels of 12 months earlier.
The data suggests Melbourne markets have been resilient price-wise in the Covid-19 period, despite the fall in sales activity which is reflected in our Winter 2020 survey of sales volumes.
In the circumstances, a result of 32 suburbs with growing sales activity is a solid performance and is better than all the quarterly surveys of 2018 and 2019.
The Mornington Peninsula has been the standout performer in our Winter 2020 survey: seven suburbs have continued to deliver growth in sales activity. Growth suburbs include Blairgowrie, Hastings, McCrae, Rye, Safety Beach, Sorrento and Tootgarook.
Quarterly sales in Safety Beach have been 33 46 45 47 54 and 64 over the past 18 months and the median house has risen 3% in the latest quarter while the median unit price is up 25% over the past 12 months.
In Hastings, quarterly sales have been 43 49 67 69 and 73 – and the median house price has increased 4.6% in the most recent quarter.
The next best LGA in terms of the number of suburbs with growing sales activity is the upmarket Glen Eira LGA, with three growth suburbs and two consistency markets. The growth suburbs are Carnegie, Caulfield North and Ormond.
There are seven municipalities with two growth suburbs each, including the Moreland LGA where both Brunswick East (63 79 80 83 and 86) and Brunswick West (52 60 63 76 and 83) are growth markets.
The Brunswick West unit market has been particularly strong, with notable growth in its median price both for the most recent quarter and over the past 12 months (up 18%).
This Winter 2020 survey has identified 11 suburbs as declining markets – a surprisingly small number given the Covid-19 circumstances – and three danger markets.
The locations we have ranked as danger markets are the Melbourne CBD, Southbank and Docklands, all inner-city apartments markets where sales activity has dropped markedly at a time when vacancy rates have spiked because of the Covid-19 impacts.
Terry Ryder is the founder of hotspotting.com.au
ryder@hotspotting.com.au
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