Melbourne property market softer than other capital cities: RBA

The Melbourne property market looks softer compared with other capital city markets, the Reserve Bank of Australia has noted in its March 2013 Financial Stability Review.

The report found Melbourne could be prone to an oversupply of stock.

“Although housing loan arrears rates are currently low across most parts of Victoria, the outlook for the Melbourne property market appears to be softer than for other large cities and some banks have signalled that they will be alert to any signs of deterioration in asset performance,” says the RBA.

“The current stock of land for sale is at a high level and building approvals data point to increases in the stock of housing, and potential oversupply, in some parts of Melbourne, particularly the inner-city apartment market.

“This is on top of previous strong supply of detached housing in the outer suburbs. The increase in the stock of housing is consistent with Melbourne dwelling prices declining further and recovering less of their earlier decline than prices in most other capital cities have done.” 

According to Residex, Melbourne recorded a modest 0.28% rise in house prices during February. It puts the median house value at $556,500 now, unchanged from a year ago.

For units, Residex found median prices increased 0.62% over February to $426,000, up just 0.51% over the year. Rents have remained unchanged over the year.

And according to RP Data the Melbourne market has been going nowhere for the last 12 months with house prices up just o.58% over the year.