According to a new report (Emerging Trends in Real Estate Asia Pacific 2019 – Link), development property investment in Melbourne has overtaken Sydney and Singapore as having the best prospects heading into the new year. This news comes at a very uncertain time for homeowners and investors, as publications debate the longevity of price drops across Melbourne and Sydney.
So, what does this mean for Melbourne’s property market, and how are these prospects expected to affect property investment in Melbourne for 2019?
How Property Investment in Melbourne Topped the Rankings
While there are a wide variety of factors to consider, the main reason given for development and property investment in Melbourne winning out over Sydney is that Melbourne’s supply pipeline is more constricted. That said, both cities are being viewed very favourably for their investment prospects, with both appearing in the top 3.
What This Means For Melbourne’s Investment Landscape
Both Melbourne and Sydney have seen impressive rental growth over the past 12 months, and while yields from said rental properties have dipped slightly, they are still performing well when compared to other major cities. This can be seen as part of a growing trend since the 1990s, as the number of private tenants in Melbourne skyrocketed nearly 60% between 1996 and 2011. This continued rise into the late-2010s has coincided with an increased interest surrounding property investment in Melbourne.
According to Emerging Trends in Real Estate Asia Pacific 2019 surveys, investors in and around Australia are still looking for investment opportunities in Australia’s major cities. This means that investments are likely to rise in the new year, which will coincide with beliefs that dropping property prices in Melbourne are likely to slow in 2019 before a rise in 2020.
However, as mentioned earlier, not all experts are in agreeance regarding how house prices will change in 2019 Shane Oliver, chief economist at AMP Capital, believes that national house prices will fall “about 4 per cent” in 2019, with changes primarily concentrated around Melbourne and Sydney.
The current property investment landscape in Melbourne may not be entirely clear, but with the city being considered the #1 investment prospect for 2019, there are a lot of reasons to get excited. Stay up-to-date with changes in Melbourne’s property market with the My Rental blog, or contact us today to learn how we can assist you with your property management needs.