After the May the federal election, and as 2019 progressed, inquiry levels and buyer activity in the Melbourne property market has slowly increased.  The perception of a business-friendly Federal Government, three RBA interest rate cuts, easing of lending restrictions by APRA and the launch of the First Home Buyer Deposit Scheme in 2020 have all contributed to increasing buyer confidence and point to a growing recovery in the property market.  This favourable backdrop coupled with strong population growth continue to drive housing market activity as evidenced by new loan commitments.

According to the latest population figures released by the Australian Bureau of Statistics, Victoria’s population growth is the highest in the nation – an increase of 132,800 residents in the 12 months to June 2019.  Victoria’s total population is now just under 6.6 million, and the State had the highest population growth rate over the past 12 months (2.1%) followed by Queensland (growth rate 1.7%, increase of 85,700 residents). 

Components of Population Growth Victoria, Quarter on Quarter

(Source:  ABS Cat 3101.0 Australian Demographic Statistics)

Net overseas migration is a key driver of population growth. ABS statistics report an increase of 83,200 overseas migrants over the 12 month period to Victoria. 

Lending indicator data published by the ABS also reports a strong increase in owner occupier home loans.  The figures are particularly interesting as they are driven by a surge of 27.5% in the value of first home buyer commitments in the 12 months to November 2019, which represents a 10 year high.

Source:  ABS Cat 3101.0 Lending Indicators, Nov 2019

Infrastructure investment by the State and Federal governments is a key driver of economic activity, and this is supporting employment growth in Victoria.  The following projects have been funded by the 2019-20 Budgets:

  • Faster Rail Program (Geelong to Melbourne)
  • Suburban Roads Upgrades (South Eastern Roads and Northern Roads)
  • South Geelong to Waurn Ponds Rail Upgrade (Stages 2 and 3)
  • Western Highway – Complete the duplication between Ballarat and Stawell
  • Sealing roads in the Dandenong Ranges and surrounds
  • Goulburn Valley Highway – Shepparton Bypass (Stage 1)

Victoria and NSW have the strongest job markets in Australia. Trend unemployment in Victoria stands at 4.7% against a national unemployment rate of 5.2%.

(Source: ABS)