Market Review 2017

Real Estate Yarra Valley2016 represented a boom year in the local market. Due to inflation in the inner-suburbs markets, buyers (especially first home buyers) have turned their eyes of the commutable yet secluded Kinglake Ranges.

Although house and land values have continued to   grow at a mean annual increase of 8%, the average first home buyer could still look for half acre residential blocks for $140,000 and 3 bedroom homesbetween $300,000 and $400,000. However, due to demand, we have seen the median price climb as some properties achieve up to 15% growth in 12 months.

There is a large demand for lifestyle properties on small acreage for $500,000 to $550,000, yet the market has seen the mean value of 4 bedroom homes on 2.5 acre allotments to $600,000 and above.

This all plays a part in the 25 year growth expansion of the Australian economy.

To summarise property fundamentals and capital growth, things will continue to change in the Melbourne and regional property market year over year. A key element in investing has always been, if a property hasn’t tripled in value in 18 years, it won’t perform in the future.

But the 8 year rule has changed, no longer will properties continue to double during this period. If the performance of the dollar and income remain, properties should take 12 years to double depending on suburb popularity and infrastructure growth. For the keen property monitor, look at historical performance, there is enough public data available to analysis trends, so check the history.

Calculate annual capital growth in arrears, and remember to take into account the simple aspects commonly missed; car spaces, main roads, floor-plan, position and orientation. Land will always appreciate and buildings always depreciate, so be careful of putting good money after bad. Be careful of future speculation as well: that bypass or that shopping centre may not go in for another 20 years, so track current council applications. The next 10 years won’t be the same as the last, so stick with what you know, be confident in your investment, and have a productive 2017.