Melbourne Property Investment Overview

Melbourne’s investment property prices are expected to remain firm as the supply of new dwellings fails to keep up with market demand.

The rental market remains strong with Melbourne’s vacancy rates remaining at a low 1.4 per cent continuing to put pressure on rents.

A number of factors point towards Melbourne as having the potential to be among the leaders in the next upswing in the Australian residential property market.

Melbourne has continued to experience strong population growth with more than 150,000 new residents, from both overseas and interstate, making their home in Melbourne during the last two years. This, along with Brisbane, is the highest population growth of the capitals.

Melbourne’s residential property prices are expected to remain firm as the supply of new dwellings fails to keep up with market demand.

The rental market remains strong with Melbourne’s vacancy rates remaining at a low 1.4 per cent continuing to put pressure on rents.

The Melbourne property market has seen rental vacancies fall to their lowest levels in 25 years and are expected to further tighten in the year ahead as underlying housing demand continues to outstrip dwelling completions. Melbourne's rental vacancy rate has fallen to 1 percent for the first time on record. The vacancy crisis is even worse within a 4km radius of central Melbourne, with just 0.5 percent of rental homes in that zone vacant.

While Interest rates will rise in 2010, a bouyant market should continue to buoy housing markets and current market conditions should provide opportunities for shrewd investors. Positive underlying economic and property market fundamentals in Melbourne should support on-going resilience in house prices in the near term and see prices grind higher in 2010-2011.

Most analysts agree the Melbourne property market has moved to a much more stable footing, which is throwing up good opportunities for investors with 2010 - 2011 seeing a more balanced market in terms of both activity levels and price growth. In other words, its a good time to invest.

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