EOFY Review


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The Secret Agent Report - EOFY Review

July 2015

EOFY Review

EOFY Review [Download PDF]

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Another financial year has come to a close. The property market over the past year has been interesting to watch. Interest rates decreased to record lows. At the same time, house prices kept rising as buyers took up the opportunity to lend in the low interest rate environment and stock levels continued to decline. The premium paid for prime property has also grown; in fact, the disparity between quality stock and average or lower grade property has never been greater.

Secret Agent decided to take an in-depth look at the market over the 2014/2015 financial year to determine how it performed in comparison to the previous 2013/2014 financial year.

Excerpt:

Another financial year has come to a close. The property market over the past year has been interesting to watch. Interest rates have decreased to record lows. At the same time, house prices kept rising as buyers took up the opportunity to lend in the low interest rate environment and stock levels continued to decline. The premium paid for prime property has also grown; in fact, the disparity between quality stock and average or lower grade property has never been greater.

Secret Agent decided to take an in-depth look at the market over the 2014/2015 financial year to determine how it performed in comparison to the previous 2013/2014 financial year.

In the 2014/2015 financial year, houses had the strongest annual growth in price and this was seen in all inner Melbourne suburbs. The growth of approximately 12% was driven by a combination of high demand and lower supply than in the previous financial year.

Annual sale prices for apartments saw an increase of 5% on average. Those located in the inner suburbs outperformed CBD apartments, however CBD apartments are still being sold at a slight premium.

Townhouses mirrored the movement of inner Melbourne houses for the first half of the financial year but due to an increased supply in May and June 2015, they ended with moderate average price growth of about 5%.

For all property types, most of the total increase in average prices occurred in the 3rd and 4th quarter of the financial year, which also coincided with the large decrease in supply of stock overall. With stable, low interest rates, supply and demand seemed to have the greatest influence on prices. Looking at houses in individual regions, the inner East and inner South saw the greatest percentage change in prices with 13% and 12% growth respectively. Houses in the inner West had the largest fall in stock levels with a 33% reduction compared to the previous financial year.