VIC Melbourne is hot 2022

We will be closer to 3% than 2 by Christmas

 

So, should we consider fix the rate or variable rate now?

 

Depends on your personal circumstances. I have liquidity coming in from inheritance’s over the next 90 days so I wouldn’t fix anything myself but everyone is different

 

Currently in Melb went to auction yesterday

How times have changed. Its like getting blood out of a stone.

2 bidders but Property got passed in.

6 months ago fierce competition. Clear signs market is softening, even for well located properties. Buyers are far more cautious

this house will sell but sellers will need to reduce price to sell

 

RE agents are getting very desperate in my area in the East. I've seen a couple of houses went for less than the 2017 peak price.

Old houses in B-grade locations are dropping the fastest. At this rate, I can see median house price in Melbourne dropping another 8-10% this year alone. Old stocks have already dropped by that much.

 

Its not hard to envisage minimum of 10-15%. Supply is not getting soaked up, then we get oversupply, then we see fall in price. Next interest rate rise in September will sting.

Many will place properties on market in Spring, oversupply watch

 

A 10pct drop in inner east will take us back to 2017 prices when rates were a lot higher and wages lower. Will likely happen, but melb is nowhere near as overpriced as the likes of sydney, auckland and i reckon Brisbane.

 

This is what I am thinking.... Melbourne will be insulated... particularly if the govt loosens temporary visas for certain professions. A lot will be health workers for Vic as their health system is a mess.

The key for the floor for Melbourne is when interstate migration to Brisbane/GC./SC stops watch for that.... but I think a 10% drop from a peak median around 1.09m to around 980k is almost in the bag. At that price there is a floor.... as there are still lots of jobs there but may slow as economy cools. But from a Cost of Living perspective Melbourne is the cheapest of the 7 largest cities (includes Gold Coast and Newcastle) by a country mile.

Same could be achieved in Sydney...but would require a fall from the peak median of 1.6m to about 1.25m which would take us to 2017 prices. But that would require a 21% fall to median which is very possible.....

Interestingly.... that could open up Perth to surpass all cities except Sydney this cycle. Most people will say this is not possible...but watch..... as we are in resources super cycle created by China/Russia.

 

Not in the eye of the beholder. If their kids have a better chance to get into medicine, dentistry and law, it’s a small price to pay. Plus someone else down the line will pay for the same premium. You have got to understand the Confucian mindset… Confucian can lead to confusion…

 

But for 150k per kid you get an even better education than a good public at an elite private school whic might get a them into brain surgery, or you could spend 10k a year for tutoring.

 

haha. Millionaire is nothing in China. Anyone who owns a standard apartment would be one. Even billionaires are 10s of millions… Now you understand why these Asian suburbs are infallible. Imagine after their water tight lock down. They can’t wait to get onto the next flight. Sydney siders and Melbournians. Are you ready?

 

@Squirrell , no no no, you need to talk to them to understand the mindset. The 150k is not spent, it’s a term deposit gaining a high % of return through CG.. The excellent education is FREE. When you sell the house, the premium is returned. Not to mention if you debt recycle, it’s money fall from the sky.

 

The auctions I've been going to have still gone within asking price. But I'm going to be in the market for a PPOR in a few months time, so the houses I'm looking at are good houses in the Northcote region and they are still selling for asking price. Perhaps 6 months ago they would have gone for well above.

 

Northcote and Thornbury have seen insane growth

 

Yes, to our detriment. We weren't in a position/space in our life to buy earlier but we will be as soon as our 21/22 tax returns for a PPOR. If we had our current incomes 2 years ago we could have bought a beautiful house, now we may have to compromise as the good ones are still going strong.

 

alternatively wait, booms dont last forever. Another interest rate rise in Sept and inflation at 7% and rising may see property fall back 10%. Its starting to soften in many suburbs. Northcote not immune to bust cycles

 

We have been watching the market since the start of the year and I do think it has softened, and realistically we won't be looking until Sept/Oct so hopefully it'll soften more by then. We aren't in a rush so the plan is to start looking and jump only if the right house comes along.

 

My ppor is in boxhill high school zone. Ill hang on and cash up for trillions in a few years.

 

LMAO

 

Seeing the same in the overpriced east. And interest rates have barely risen yet!

Buyers are cautious in the eastern suburbs and rightfully so. Even if prices stay flat, the low yields and ever inflating holding costs will eat you alive. capital growth won't be here for a long long time to bail buyers out this time.