Article by: Terry Ryder
We called it in October 2015 and Melbourne has delivered. As forecast by Hotspotting, Melbourne has zoomed past Sydney to become the No.1 city on price growth.
It’s the first time in three years that Sydney has been knocked off its perch.
But the change at the top was predictable. The Sydney market peaked a long time ago while Melbourne still has good momentum.
Melbourne’s stellar property market is supported by key factors: the underlying economy, strong business confidence and nation-leading population growth.
Victoria is now the state that gains the most from interstate migration.
Victoria was one of only two states that gained from net interstate migration (up 10,190) in 2015. It’s been gaining from cross-border migration since 2009. Melbourne is also the city that gains the most from overseas migrants.
The business sector is strong as well. The latest data shows that 21,000 new small businesses started operating across Australia last year, headed by Victoria where 8,600 new ventures opened.
This means Victoria provided over 40% of new businesses in 2015. Peter Strong of the Council of Small Business in Australia says this reflects a high level of confidence in the community.
So what does this mean to you as a real estate investor?
Melbourne has the greatest number of growth markets anywhere in Australia. Brisbane and South-east Queensland is challenging, but Melbourne remains on top.
The greatest impetus in Melbourne is found in the middle-market areas and cheaper outlying suburbs. The outer-ring precincts favoured by first-home buyers and investors on a budget are really pumping.