Melbourne makes its move to number one
The rivalry between Sydney and Melbourne is as famous as that between Wile E Coyote and the Road Runner, the Maroons and the Blues, or Taylor Swift and Kanye West.
For generations, the two cities have been in a war over which reigns supreme in the coffee, fashion, culture and sports stakes.
And in the real estate domain, it’s no different.
House price growth in the New South Wales capital has long topped the national leader board, especially so in the past several years, with Melbourne playing catch-up in second.
Likewise, the state’s economy has been booming while things in Victoria have tended to stop and start of late.
If Sydney was the sparkling wedding day bride, Melbourne has been the consummate bridesmaid for many, many years.
But that all looks to be changing. Melbourne’s time in the shade seems to be coming to an end and finally the city could be about to shine in its very own spotlight.
It’s boom time once again
For the first time, the Victorian economy has just taken the mantle as the best-performing in the country on CommSec’s rating of state coffers.
The surprise result relegated New South Wales to second place after several years on top.
Across almost all key indicators, Victoria is a powerhouse of late.
Economic activity in the March quarter was a whopping 26.5 per cent above its decade-average level of output.
Retail spending was 17 per cent above the average, supported by home building, population growth and robust employment.
Infrastructure investment is at unprecedented levels, with a range of major road, transport, health and education projects under way.
And Victoria’s labour market also remains strong, with more than 340,000 new jobs created in the past four years.
It’s hard to find any bad news in the economic data.
Melbourne is the place to be
The outlook for population growth in Sydney has started to weaken, with projections not quite as robust as they once were.
The rate of interstate migration from New South Wales to Victoria is also on the rise.
It’s something Sydneysiders never would’ve dreamed of once upon a time – moving to Melbourne! But it’s precisely what they’re doing in droves.
Across the board, Victoria’s population is growing.
Earlier this year, demographer Bernard Salt made a startling prediction that Melbourne’s population will pass five million in the next three years.
And by 2030, he says it’ll dwarf Sydney as the most populated city in Australia.
With a night life that doesn’t end abruptly, a bustling culture, that famous coffee and those winding laneways… it seems Melbourne is a very enticing prospect.
What this means for property
Melbourne’s booming economy and soaring population are good news for the city’s real estate market.
A growing population means rising demand for housing. That’s common sense. But new housing starts in Melbourne came off the boil in recent years, thanks to a flood of dwellings to the market.
It’s only just started firing up again recently, with a boom in construction. Dwelling starts in Victoria are now leading the country, with commencements 42.5 per cent above the decade-average.
But as the number of new residents continues to increase, stock levels will be playing catch-up. This means upward pressure on house prices.
But it’s the economic side of things that spells good times for real estate.
When the economy is doing well, people feel more confident to spend money. Retail spending lifts, confidence in the business sector follows and everyone looks to the future with more optimism.
People also feel more assured about making investment decisions – such as buying homes.
First-time buyers will enter the market, existing homeowners will upgrade, and newly confident investors will park their cash in Melbourne.
The signs for the city’s property market are probably the most positive in Australia at the moment. Always the bridesmaid? Not anymore.
Getting the right financial advice about buying in Melbourne
Sydney was the undisputed economic champion for years, but times are a-changing.
The Melbourne economy is officially number one in the land and it’s likely to stay that way for some time to come.
The world of banking and finance can be a pretty daunting one for both novice and sophisticated investors and since our establishment in 2002 we’ve focused on providing outstanding service and business standards.
This approach has been vindicated many times by our multi award-winning approach.
So, if you’d like to understand more about buying in Melbourne, why not contact Intuitive Finance today to ensure you have the right information and expert support on your side from the very beginning.
If you’d like an expert to teach you more about the Melbourne property market or if you have any other questions, please just contact us directly and we’ll be in touch.
Discuss your specific needs & formulate the right strategy for you. Get in touch to organise your complimentary 60min session today!
The information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs.
Latest posts by Andrew Mirams (see all)
- It’s either savings or selling as many interest-only terms expire - September 18, 2018
- Melbourne makes its move to number one - September 11, 2018
- Changes to QLD’s first home buyers grant: could you own your new home sooner? - September 7, 2018