No Melbourne house price growth for next few years as buyers disappear: REIV

The Real Estate Institute of Victoria (REIV) expects no appreciation in the Melbourne housing market in the next few years, with a lack of demand for real property one of the reasons.

In his June 2012 State of the Victorian Property Market report, REIV spokesman Robert Larocca includes a graph that shows particularly low levels of first-home buyer demand for property, as well as a fall in the number in other buyers. The first-home buyer market is often seen as the springboard for growth elsewhere in the market.

First-home buyer numbers have fallen from a high of 4,595 a month in May 2009 to just 1,980 as of April 2012 – having hovered around the 2,000 mark since October 2010.

“Low rates of economic growth in Victoria coupled with lower population growth and with almost no unmet demand underpin at best moderate growth in the medium term,” says Larocca.

The graph shows that from March 2009 to April 2009 there were more than 4,000 first-home buyers every month.

This was a time when the Victorian government’s first-home owners’ boost was available (in addition to the $7,000 federal first-home owners’ grant).

It offered an extra $14,000 for those who built a new home or bought a newly constructed dwelling and an extra $7,000 for those buying an existing home and ran from October 14, 2008 to September 30, 2009.

The boost halved from October 1, 2009 to December 31, 2009.