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As Melbourne’s property market has entered a new phase over the last year or so, it’s gained a lot of media attention. Some commentary has been reasonable, some not so fair, and some simply designed to scare people. We decided to sort the facts from the fiction by speaking with Satterley’s General Manager for Victoria & Queensland, Jack Hoffmann.

The property market, just like any market, changes all the time. For many years, particularly after the Global Financial Crisis, you might have heard it being described as “booming”. Some people are talking about the period we’re now in as the end of that boom. Some are calling it a slowdown. A few in the media have described it in far more dramatic terms.

From Jack Hoffman’s perspective, the market has definitely changed, although the dire predictions for the future seem totally unwarranted. Jack’s been in the industry for 15 years and has his finger on the pulse of the Melbourne land market. He believes that after record volumes for many years, such a variation was inevitable.

“Median lot prices increased by about 50 percent over five years from approximately $220,000 to about $330,000.

“The Victorian market was turning over 24,000 lots per annum. The long-term average was 12,000. We’re now moving back to that long-term average, which is a healthy balance between supply and demand,” he explains. What some in the media have tried to turn into some kind of shocking “event”, Jack describes as part of the ongoing property cycle, simply the next phase in a sequence that’s affected by numerous economic factors.

“The market fundamentals are still strong, which provides a solid base for the property market,” Jack says. One of those fundamentals is population growth. More people coming to the city means more people needing a place to live and that increases demand for property. Melbourne is Australia’s fastest growing city and will soon overtake Sydney as its largest (by population). That rapid growth doesn’t look like stopping any time soon.

Jack says this is a vital point that seems to be overlooked in some of the more exaggerated commentary on the subject.

“We’ve been disappointed with some of the reporting that’s taken place; it’s shown a worst-case scenario without regard for more likely scenarios. We can’t see anything like what’s been described occurring.”

While Jack concedes that factors like the Royal Commission into the financial industry has created some uncertainty and may have affected confidence, he and his colleagues at Satterley are seeing continued strong levels of demand. While it’s always difficult to predict exactly what the future might bring, his short-term forecast is for the market to remain relatively steady.

To home owners or those thinking of buying land, Jack’s advice is simple.

“Property is an investment that needs to be held for the medium to long term. The market will behave differently over that time. There’ll be cycles,” Jack says. “Don’t pay too much attention to sensationalist media reporting.”