What to expect in 2017
Author: Geoff White, REIV CEO
Date: 3 Jan 17
Lower stock levels, record low interest rates and strong population growth will encourage buyer interest well into 2017. Agents were already filtering listings for February, well ahead of the close of the 2016 year – a very positive sign for the first quarter of 2017.
In Melbourne, growth is expected in a range of areas across the city. Houses in Melbourne’s outer suburbs have grown steadily throughout 2016, and given that days on market for the outer suburbs are the lowest in the state, at 28 days, this interest is likely to continue in 2017.
Final Year-End Wrap:
Median Price Overview
Early indicators of the December quarter medians show another increase in the metro Melbourne house price is likely. Listings picked up in the month of December and auction sales were the highest on record. We expect this to carry over to the March quarter, though this will be offset somewhat by the usual post-holiday slow-down in January. The March quarter median price is therefore expected to also rise, though at a more moderate rate.
Victoria is Australia’s fastest growing state, and the Victorian economy has added more than 184,000 new jobs since November 2014, with more than 93,000 of those full-time. The 2016/17 Budget Update shows Victoria’s economy continuing to grow above trend and November ABS data shows that for the 2015-16 year, Victoria’s gross state product (GSP) grew by 3.3 per cent. With the residential property market slowing in most states in 2016, Victoria’s market defied this trend and its strong economic indicators would indicate that the housing market is likely to remain solid in 2017.
Top 10 Suburbs
Some of the top suburbs to watch in 2017 include:
Hoppers Crossing – Outer south west suburb with median house price growth of 15 per cent in the past year, despite a high number of transactions. Solid auction activity (84 per cent clearance rate) and a relatively tight private sale market (median of 28 days on market) signals strong buyer demand with future price growth expected.
Median price: $416,750
Frankston North - Close to the bay and several golf courses, Frankston North is one of the city’s most affordable suburbs. Saw double-digit annual growth in 2016 and one of the city’s best private sales markets with homes selling in a median of just 21 days. Excellent opportunity for first home buyers to enter the market.
Median price: $353,500
Fawkner – Has a relatively affordable median house price and has shown significant capital growth in the past 12 months (up 18 per cent). Located within 12km of the Melbourne city centre and serviced by two train stations, Fawkner offers value for money.
Median price: $614,000
Ardeer – Offers affordable buying within the city’s middle suburbs and has seen price growth of more than 20 per cent this year. Strong auction market with a clearance rate of 89 per cent recorded for the year to September. Nearby suburbs, including Sunshine, have experienced significant growth this year, which is likely to impact prices in Ardeer next year.
Median price: $543,000
Montmorency – North east suburb seeing strong buyer interest with a clearance rate of 81 per cent recorded in the year to September. Solid price growth experienced in 2016 and a median house price more than $100,000 below the middle Melbourne median of $861,500. Likely to benefit from the ripple effect and buyers looking for value further from the city.
Median price: $752,000
St Albans – Another north west suburb which is poised for future growth in 2017. Offers affordability given its proximity to the city (15km) and has recorded significant growth in the past 12 months, up 23 per cent. Experienced a high number of transactions in 2016 with little impact on the suburb’s clearance rate or private sale market.
Median price: $518,750
Hadfield - 13 km north of CBD with 9.2 per cent quarterly growth and 5.4 per cent annual growth in 2016. Auction sales have increased 29 per cent on 2015 figures, with 88 per cent of those that went under the hammer selling. Half of the suburb’s auction sales occurred in the September quarter, indicating that interest in Hadfield is gaining momentum. Properties in Hadfield sold in a median of 29 in November, below the average for metro suburbs.
Median price: $650,000
Kings Park – Located 20 km north west of CBD, Kings Park experienced double-digit annual growth (14.9 per cent) in 2016. Auction transactions increased 313 per cent over 2016 with an 89 per cent clearance rate. The suburb also has a strong private sale market with homes selling in a median of 27 in November.
Median price: $426,000
Delahey – Another north west suburb which recorded significant capital growth in the September quarter, increasing 20.3 per cent. Located on the fringe of the city’s middle ring, Delahey remains affordable given its proximity to the city and experienced an increase in auction sales in 2016. Privately sale market is also solid with homes selling in a median of 30 days in November.
Median Price: $475,000
Mernda – This outer north east suburb experienced moderate annual growth of 6.5 per cent in 2016. Infrastructure improvements including rail extension from South Morang is likely to result in further growth in 2017.
Median Price: $444,000