Insights

The Melbourne real estate market in 2024 has shown resilience and adaptability amidst evolving trends, economic pressures, and shifting demographics. Here’s a summary of the year’s highlights:

Market Performance and Price Trends

Growth in Prices: Melbourne experienced a steady rise in property values throughout the year, with forecasts from major banks like NAB and CBA predicting price increases between 3-5.5% due to reduced interest rates. The cash rate cuts by the Reserve Bank of Australia have lowered financing costs, stimulating buyer demand.

Outer Suburbs on the Rise: Areas like Point Cook, Tarneit, and Werribee have gained popularity due to affordability, larger properties, and improved amenities.

Inner-City Units Rebound: High-density housing has become increasingly attractive, with unit rents surging due to a return of international students and renters prioritising proximity to the CBD.

Key Drivers

Population Growth and Migration: Melbourne continues to attract international students and migrants, bolstered by its reputation as a global education hub and its diverse culture. The city is on track to overtake Sydney as Australia’s most populous city.

Sustainability Demand: Buyers increasingly seek energy-efficient homes with eco-friendly features, prompting developers to focus on green buildings.

Challenges and Opportunities

Rental Market Tightness: With reduced rental listings and growing demand, rental prices have seen significant increases, particularly in central areas like Southbank and Docklands. Investors are benefiting from strong yields.

Legislative Changes: New policies such as the “Help to Buy” scheme and an increase in the absentee owner surcharge are shaping buyer behaviour and impacting offshore property owners.

Outlook

Melbourne’s property market is expected to continue its recovery in 2025, supported by stable interest rates, migration, and infrastructure development. However, affordability remains a challenge, particularly for first-time buyers, as demand grows faster than supply.

For more detailed insights, feel free to contact your local Hodges Real Estate expert!