There has been a high level of media coverage surrounding recent economic turmoil, which has resulted in sharp fluctuations in the stock markets, both domestically and internationally. With so much volatility in the share market is worth reviewing property market trends.
REIV analysis of the Melbourne property market over the last two decades reveals that the price of a detached house has, on average, doubled every 10 years, which underscores popular confidence in property as a solid medium- or long-term investment.
Historical evidence shows that in 1987, the year of the last significant stock market drop, the median house price of a house was $97,000. For each of the following three years the median price increased by over 10 per cent, resulting in a median price of $147,000 in 1990.
In the 10 years to 1997 the median price had doubled from $97,000 to $179,500, more than doubling again to reach $425,000 by 2007.
Despite the median price dropping during subsequent years − in 1991, 1993, 1995 and 2005 – a solid appreciation in value over the medium term became apparent. It is important, however, to appreciate that this research refers to the overall Melbourne median and not each and every property.
The other important point to take into account is Melbourne’s current shortage of rental homes – the lowest vacancy rate in over 20 years. Strong demand for more rental properties is therefore inevitable, and provides incentive for investment in residential property.
These factors, combined with a weekly population influx of over 1500 people into Victoria, should help ensure strong demand for residential property and reasonable returns over the next decade.
If interested in learning more about this update please contact me today!
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As Domain Property Advocates continues to grow I will continue to provide superior service to those choosing to use property as their investment. It is an important choice of who to choose as the one responsible to look after your property. You can be sure that Domain Property Advocates will always strive to be the best. |  |
