Modest Growth Predicted for Melbourne Home Prices in the Coming Months

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Australia’s major banks are projecting a measured increase in Melbourne’s housing market over the next 16 months, with estimated growth rates ranging from 0.5% to almost 10%, according to their latest predictions.

ANZ is the most cautious among the four major banks, predicting a slight decline of under 0.5% in dwelling values by 2023’s close, followed by a modest 1% growth in 2024. In contrast, Westpac expects a 3% increase in home prices for the rest of this year and foresees a further 4% rise in 2024.

The Commonwealth Bank of Australia (CBA) predicts a 3% increase in home prices by the end of 2023, followed by a 6% surge in 2024. In contrast, the National Australia Bank (NAB) is even more bullish, projecting a 2% growth in home prices by year-end and a significant 7.4% rise the following year, resulting in a total increase of 9.4%.

“There’s a lot of properties coming to the market at the moment, and that’s coincided with the mortgage cliff, which the CBA has said will peak this month,” Nerida Conisbee, Chief Economist at Ray White, commented.

Aligned with recent PropTrack data, Victoria achieved a preliminary 68.3% clearance rate from 435 early auction results this week. In Melbourne’s market, the median house price is $875,000, and the median unit price is $595,000.

Jarrod McCabe from Wakelin Property Advisory notes that hitting the more optimistic growth targets necessitates higher clearance rates and substantial interest rate cuts, possibly in the 0.5% to 1% range.

“The market has been very tough at the moment; Things are taking a lot more work at the moment, but we got this one sold, and the vendors are very happy with the result,” Ray White Balwyn’s Helen Yan said.

The upcoming months are anticipated to reveal the realisation of these projections, considering economic and market factors that could impact housing prices.

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