Source: ANZ statements
CoreLogic’s Head of Research, Eliza Owen said: “The downturn in the Melbourne housing market is holding, with six consecutive months of decline through to August 2024. As a result, we’ve seen a significant shift in affordability, with dwelling values falling by 4.9 per cent from the peak.
“Coupled with modest income growth, Melbourne has become one of the few markets where housing affordability is improving. Some of the largest improvements in affordability over the past two years has been in some of the more expensive areas of the Melbourne market, such as Flinders on the Mornington Peninsula and the inner-south suburb of Beaumaris.
“The rental market however remains tight, with rental values growing at an average annual rate of 8.4 per cent over the past three years. This will see renters continue to struggle when coupled with ongoing low vacancy rates,” she said.
ANZ Economist, Madeline Dunk said: “Melbourne is currently gaining an affordability advantage on other capital cities, which presents a silver lining for buyers. However, to maintain affordability, measures to support ongoing residential construction will be vital.
“Nationally, the median dwelling value to income ratio has increased, making it more challenging for households to save for a home deposit.
“Elevated interest costs, low pre-sales, competition with the infrastructure sector for trades, and higher building costs could impact future dwelling approvals, commencements, and completions. This could lead to further declines in housing affordability across the country,” she said.
The full report is available at ANZ bluenotes.