Melbourne

The Victorian State Budget was tabled in State Parliament on 27 May 2019.  The State Government continued to support record investments in infrastructure including:

  • $15.8 billion to fully fund North East Link.
  • $6.6 billion to remove another 25 level crossings.
  • Public transport investments of $3.4 billion to upgrade the Sunbury Line, Stage Two of the Hurstbridge Line and duplicating the Cranbourne Line.
  • $1.6 billion to plan, build and expand new local hospitals.
  • $154 million to create more than 6,500 hectares of parkland with new walking and bike trails.

Premier Daniel Andrews has committed to an ambitious infrastructure spend of more than $100 billion underway or commencing in the next 2 to 3 years. This will cater for the current population growth of around 140,000 per annum, which is projected to continue into the future. At the same time this huge commitment will also provide ongoing employment growth for the growing population.

Whilst market sentiment has improved since the Federal Election, sales volumes continue to track at well below 10,000 lots per annum, with Research4 estimating the adjusted demand to be around 9,500 lots per annum until the market normalises. Prices are down in some growth corridors by as much as 20%, although some like the Officer area have proven more resilient than others due to lesser numbers of competing estates. Cancellations have increased and are expected to continue to rise before peaking in early 2020, as sales that occurred before the market downturn fall due for settlement. Auction clearance rates have improved since the Federal Election, reaching around 70% in Melbourne and 67% in Sydney, compared to 60% and 50% respectively for the same time last year. (Source: Research4; CoreLogic)

With the continued strength of the Melbourne employment market, population growth remains in the order of 140,000 per annum. With an increase in employment during May of 28,600 ABS data on employment shows that the strong employment growth in Victoria continues.  This was second only to NSW at 38,500.  The seasonally adjusted unemployment rate in Victoria fell 0.3% to 4.6%, equal to NSW and well below the national unemployment rate of 5.2%. (Source: ABS)