SQM forecasts Melbourne house price recovery between 2% to 5%

The Melbourne housing market is predicted to record a modest high price recovery of between 2-5% in 2013, according to SQM Research’s Melbourne’s Housing Boom and Bust report.

Managing director of SQM and property analyst Louis Christopher offers his assessment in the report and sticks to his forecasts outlined in the September 2012 issue of the same report.

“The best returns out of Melbourne for this year will likely come from houses in the inner city excluding Docklands and Southbank,” says Christopher.

Christopher says vendors have become more confident since the start of the year in areas such as Albert Park, Carlton, Port Melbourne and Toorak.

Christopher predicts vendor confidence will extend to other parts of inner and middle Melbourne

The report warns against the market in Docklands and Southbank due to the elevated vacancies in those areas and the fact that more developments are in the pipeline.

“However we hasten to add there is still a lot of stock on the market, particularly in some outer ring areas that we cautioned on last year,” says Christopher.

The supply of stock coupled with Victoria’s rising unemployment rate of 6.1% is also inhibiting price growth.

Christopher suggests resurgence in the service sectors may provide a much-needed stimulus to Victoria’s economy.

The median house price for Melbourne is currently $561,500, a 5.1% increase from the December quarter of $534,000.

The SQM Research Melbourne’s Housing Boom and Bust report will be available via the SQM Research website for $59.95.