Welcome to 2020 – The Luna New Year of the Rat. Known for being inquisitive and resourceful.
House Sales & House Prices
According to the HIA New Home Sales report, the sales of new detached houses rose by 2.8 per cent across Australia. The HIA New Home Sales report is a monthly survey of the largest volume home and is a leading indicator of future trends in the residential building industry. Overall, it is great to see a positive increase in sales.
There was also some good news for Melbourne property owners. According to CoreLogic, the price of Melbourne homes has increased annually by 8.2 per cent since January 2020, which was the highest growth of all Australian capital cities.
Along with a rise in new home sales, the price of properties is also predicted to increase this year with AMP’s Capital Senior Economist, Diana Mousina stating “We expect national home prices to increase by around 10 per cent in 2020”. This will be a positive outcome for all Melbourne home owners in 2020.
“We expect national home prices to increase by around 10 per cent in 2020”
Diana Mousina, AMP’s Capital Senior Economist
Furthermore, auction clearance rates for December finished strong with an auction clearance rate of 73 per cent and a total of 1,227 auctions being held. This is a considerably better result than the 48 per cent clearance rate achieved 12 months earlier. These figures show a return in confidence in the property market.
Positive Initiatives & Population Growth
To further support first home buyers, the Australian Government released 10,000 places in January 2020 for the Federal Government’s first home loan deposit scheme grant. The Government proposes another 10,000 grants are to be made available from July 2020, which will be sure to help further boost sales of new homes. The grant allows those eligible to buy a house-and-land package with a deposit between 5% and 15% of the property’s value, compared to the usual 20%, without taking out lender’s mortgage insurance. This initiative from the Government will certainly help to encourage more sales and allow more people enter the housing market.
Victoria’s population continues to grow at a decent rate, according to the Australian Bureau of Statistics (ABS). Victoria recorded the highest growth rate of all States and Territories at 2.1% as of June 30th 2019.
The AFR predicts Melbourne is to become the most populous city by 2026 and is estimated to grow 28% faster than Sydney over the next six years. With this predicted growth in mind, we can expect a greater demand for housing across Victoria over the coming years.
In light of the above, I am looking forward to another prosperous year.
- HIA – “New Home Sales: Glimmer of Light at the End of the Tunnel” [online] – Media Release - 17/01/2020 - https://hia.com.au/-/media/HIA-Website/Files/Media-Centre/Media-Releases/2020/national/new-home-sales-glimmer-of-light-at-the-end-of-the-tunnel.ashx
- AUSTRALIAN FINANCIAL REVIEW – “Melbourne home prices to rise faster than Sydney in 2020” [online]– Nila Sweeney - 19/12/19 – https://www.afr.com/property/residential/melbourne-home-prices-to-rise-faster-than-sydney-in-2020-20191219-p53lfs
- ABC – “House price rise spreads beyond Sydney & Melbourne” – Michael Janda – 03/02/20 - https://www.abc.net.au/news/2020-02-03/house-price-rise-spreads-beyond-sydney-melbourne/11923136
- Domain – “Melbourne Auction Results” – 17/12/19 - https://www.domain.com.au/auction-results/melbourne/2019-12-14
- AUSTRALIAN FINANCIAL REVIEW - “How to get one of 7000 first home grants” [online] - Duncan Hughes – 01/02/20 - https://www.afr.com/property/residential/how-to-get-one-of-7000-first-home-grants-20200130-p53w6j
- AUSTRALIAN BUREAU OF STATISTICS – “3101.0 - Australian Demographic Statistics, Jun 2019” [online] – 19/12/19 - https://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/3101.0
- AUSTRALIAN FINANCIAL REVIEW – “Melbourne set to overtake Sydney as nation's largest city by 202” [online] – Duncan Hughes – 02/01/20 - https://www.afr.com/companies/infrastructure/melbourne-set-to-overtake-sydney-as-nation-s-largest-city-by-2026-20191226-p53mww
- ABC – “House prices finish 2019 on a high, as Sydney and Melbourne lead gains nationally” – Nassim Khadem – 03/01/2020 - https://www.abc.net.au/news/2020-01-02/house-prices-finish-out-2019-higher-sydney-melbourne-lead-gains/11836990