Melbourne’s property landscape has drastically changed in the past 10 years and aside from price, other changes have made way that shape it to be what it is today.
Bruce Oliver co-founded the Melbourne-based agency Xynergy Realty in 2008 and discusses the key changes to the Melbourne property market that he has witnessed in past decade.
The GFC and how Australia recovered
By 2009, Australia’s economy recovered relatively fast from the GFC, thanks to effective and strong government policies that supported the market, but Bruce believes this had an effect on prices.
“Low interest rates made it easy for people to enter the housing market, but it constantly pushed prices up meaning that homes in Melbourne in 2018 are as unaffordable as ever.
“Despite the benefits to the overall economy, the condition did push first home buyers to postpone plans due to increasing house prices,” he said.
Increase in foreign buyers
The increasing demand from foreign buyers resulted in a rise in Melbourne’s house prices as well as an increase in new developments.
“Ten years ago, foreign property investment was not common and it has changed the type of properties that are in demand in Melbourne.
“Foreign investors have driven demand for CBD apartments which in turn has resulted in the rapid rate of new developments being built,” said Bruce.
Changes in incentives
To boost the economy, the government generously gave first home buyers incentives in 2008-2009, however, incentives were rolled out later on to combat the increased property prices that initial incentives helped create.
The government has now offered help to first home buyers by giving stamp duty savings to combat the high prices.
“Even within the past ten years, we have seen differing reasons for the government giving incentives to first home buyers, but what has changed the most is how much harder it is for them today,” he said.
New suburbs and changing sizes of homes
Bruce says he has seen a shift towards newer suburbs for buyers to maximise their budget.
“We now have suburbs that didn’t even exist 10 years ago such as Tarneit Plains and Pakenham East emerge with Melbourne’s seams expanding more and more.
“These suburbs have seen such a high demand not only because of population growth but because people want to have a backyard, particularly as the average size of new-build Melbourne dwellings are decreasing,” said Bruce.
Historically, house sizes have risen but with the increasing number of apartments and smaller block sizes in new estates, a report commissioned by CommSec shows that the size of new-built homes has decreased from 2013 to 2016.
Suburbs have a skyline
Tall buildings used to be limited only to Melbourne’s CBD but today, suburbs known for larger homes are now finding themselves with skylines.
Box Hill will soon have a 36-storey tower and Moonee Ponds is currently seeing a 30-storey building being constructed.
“The space limitation in inner, high-density Melbourne suburbs combined with the availability of amenities in the area has seen suburbs transformed with an increasing density,” said Bruce.
This year marks Xynergy Realty’s ten-year anniversary, providing a time to reflect on all the duo have been able to achieve and how the market has changed.