Melbourne’s real estate prices have soared, not only surpassing pre-pandemic levels, but also setting new records for house and unit prices. The median house price is currently A$936,073, and has risen by 5.3% in the last three months of 2020, setting a record high of A$907,600 since the March quarter when the epidemic broke out. According to the recent December quarterly house price report released by Domain, the median apartment price has risen by 4.4% overall, and the median price is $569,677, which is $14,000 higher than the 2019 record.
For most of 2020, competition in the Melbourne real estate market has shifted to the Internet. Public auctions have been banned for several months, and private one-on-one inspections have been prohibited to prevent the spread of the virus. From August to October, the city was closed due to the second wave of outbreaks in Melbourne, and the housing market was forced to suspend. However, Domain senior research analyst Nicola Powell said that the strict blockade policy was one of the reasons why the Melbourne market performed well at the end of the year.
Record low interest rates have boosted the demand of first home buyers, but this may dry up in the near future. He said that the very small number of immigrants may also affect the market. International students may not return until next year, which will keep the rental vacancy rate high. The Reserve Bank of Australia will pay close attention to the level of household debt in Australia and how the new lending standards will make it easier for people to apply for mortgages. Interest rates are expected to rise in 2022.
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