REGIONAL Victoria has seen a drop in home prices, according to the latest PropTrack Market Insight Report.<\/p>\n
Home prices in regional Victoria have fallen by 4 per cent since May 2022.<\/p>\n
This follows a substantial 44.9 per cent increase in the two years before the first interest rate rise.<\/p>\n
The decrease is attributed to fewer buyers and increased market choice, which reduced competition.<\/p>\n
PropTrack senior economist Eleanor Creagh said that despite expectations of a significant drop in house prices with rising interest rates, the market has shown resilience.<\/p>\n
“From mid-2022, as interest rates climbed and borrowing capacities fell many expected house prices to follow suit, but home prices have proved resilient inthe two years since interest rate tightening began. However, performance has varied across the country.”<\/p>\n
Hobart and regional Victoria experienced the most significant reversals in growth.<\/p>\n
Prices fell in regional Victoria by 4.0 per cent with total listings up 79.2 per cent, leading to fewer buyers and more choices, which reduced competition and drove prices down.<\/p>\n
Ms Creagh said that while major shifts in monetary policy and the wider economic environment clearly influenced house prices, recent market developments have shown that interest rates are not the only factor.<\/p>\n
“The profound impact of supply and demand dynamics have outweighed the most substantial interest rate tightening on record and subsequent deterioration in affordability.”<\/p>\n
Melbourne’s home prices, which had grown by 20.8 per cent in the two years leading up to May 2022, are still down by 1.9 per cent since the rate hikes began.<\/p>\n
Nationally, despite the rapid rise in interest rates starting in May 2022, home prices have experienced 17 consecutive months of growth.<\/p>\n
They are now 6.2 per cent higher than in May 2022.<\/p>\n
Ms Creagh said rising interest rates could reduce home prices by lowering borrowing capacities, other factors could be significantly influential.<\/p>\n
“Interest rates began to quickly rise in May 2022, and after 425 basis points of tightening, national home prices have cycled through their 17th consecutive month of growth, now up 6.2 per cent since May 2022,” Ms Creagh said.<\/p>\n
Strong population growth, tight rental markets, home equity gains, low stock on market, and an undersupply of new homes have offset the significant reduction in borrowing capacities and deterioration in affordability that came with substantial interest rate tightening.<\/p>\n","protected":false},"excerpt":{"rendered":"
REGIONAL Victoria has seen a drop in home prices, according to the latest PropTrack Market Insight Report. Home prices in regional Victoria have fallen by 4 per cent since May 2022. This follows a substantial 44.9 per cent increase in the two years before the first interest rate rise. The decrease is attributed to fewer […]<\/p>\n