• #298: Is Melbourne’s Property Market About to Turn? A Data-Driven Look at What’s Next

  • Feb 24 2025
  • Length: 54 mins
  • Podcast

#298: Is Melbourne’s Property Market About to Turn? A Data-Driven Look at What’s Next

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  • Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM


    Cate hosts today's show and she opens the conversation with the most recent interest rate cut. What could it mean for the property market? And will we see consecutive cuts in the short-term?

    Dave shares his perspective on Melbourne's anaemic property performance and he contrasts this miserable growth against some of the other capital cities. Looking at 10 years of data shows the following:
    • Melbourne, in contrast to other cities, experienced most of its growth pre-2020, with very little price appreciation in recent years.
    • Perth, Brisbane and Adelaide have seen the vast majority of their price appreciation occur from 2020 onwards.
    • Adelaide and Brisbane have been the major out-performers over the past decade.
    • Sydney saw strong growth pre-2020 and has since experienced more moderate gains since.
    Key indicators for Melbourne being at a turning point are interesting, and Mike chats about rental yields, and relative affordability, but what do the Trio think about the adoption of the mean reversion theory?

    Cate shares her thoughts about Melbourne's strengthening yield and in particular, the reason for the decay of rental stock over recent years. There is no doubt about it, rental yields play an important role in investor decision-making.

    Home Buyer sentiment is another important key indicator, and this has jumped recently in Victoria. This has been in stark contrast to Perth, Brisbane and Adelaide where it has fallen significantly.

    The Westpac Melbourne Institute Consumer Sentiment Survey “time to buy a dwelling” index nationally reached 89.9 in January, its highest level in nearly three years. Sentiment counts for a lot, but as Mike points out, "Sentiment is a tricky thing". Can large waves of buyer's agents skew a market? Can an artificial environment drive price movement when a disproportionate number of buyers agents all compete? Cate talks about the scenarios where this may be the case, but she feels that owner-occupiers are more likely to move markets. Fear of missing out is a genuine concern for many prospective upgraders and first homebuyers.

    How have Melbourne’s median property values changed over the past few years, and what does this tell us about where the market is headed? Dave leads our listeners through some great contrasts between capital cities. Intrastate migration has played a role too.

    Mike touches on dwelling value to income ratios and the Trio consider the pull of affordability and job opportunity in other cities, both regional and capital.

    Is now a good time for investors and homebuyers to consider Melbourne? Tune in to find out!

    .... and our gold nuggets!

    Mike's gold nugget: In a sea of positive data points, the sentiment remains the interesting one to follow. Mike feels this will become a more robust indicator of price growth.

    Dave's gold nugget: Dave maintains that 2026 is going to be the year for Melbourne! But he reminds listeners that they should make the right decisions based on what is right for their own personal economy.

    Cate's gold nugget: League ladders change all the time. There is no fixed order for performance of cities and history has shown us how this has alternated over the years.

    Show notes: https://www.propertytrio.com.au/2025/02/24/is-melbourne-about-to-turn/
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