Question for Melbourne brokers

Discussion in 'Property Market Economics' started by Nina00, 26th Jun, 2021.

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  1. Nina00

    Nina00 Well-Known Member

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    Victoria
    I’m interested in learning more about who the buyers are that are able to pay exorbitant prices for houses in Melbourne. I’m not talking about affluent areas like Toorak that were alway expensive but more so the average suburban house. Are they the average couple that have heaps of equity from their previous house and can now spend 1.4 million on an average house in the burbs?
    Have these people stretched themselves to the absolute max and will they struggle when interest rates go up? Just trying to understand what is happening and the potential outcome of this crazy market.
    So basically what types of people are buying in this market?
     
    momentum26 likes this.
  2. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    03 9877 3000
    Very few investors are buying $1.4M properties anywhere. Most of the investment deals I see are under $700k.

    Owner occupier deals in Melbourne often go to $1.5M, most people are stretching their serviceability to achieve this. As rates increase some will find themselves in mortgage stress, but most will be able to adapt. Keep in mind that lenders assess using rates at least 2.5% higher than what people actually pay.

    There are also several other layers of conservative measures in place restrictinghow much people can borrow. . A few years ago peoples borrowing power was significantly higher as were interst rates, but default rates were not materially different.
     
    Nina00 likes this.
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
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    Location:
    Gold Coast (Australia Wide)
    We do a bit in Melbourne

    Simples i believe. Lots of demand little supply.


    Many cashed up expats coming back

    Many folks that would normally go OS for a few years to work arent, and are buying instead.

    Confidence in the general economy

    Investors that want a big city, but cant find value in Sydney​

    ta
    rolf
     

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