Victorian residential buyers remain apprehensive after global financial nerves and a slowdown in primary industries in Victoria forced down dwelling values in Melbourne, according to CBRE.
CBRE’s Q2 2012 Victoria Rresidential MarketView report says over the past 18-24 months Melbourne experienced the biggest reductions in capital values in more than a decade.
Over the year to March 2012, according to Residex, capital values declined by 6.2 percent - this is compared to an increase in value of 6.7 percent for the year to March 2011.
Over the year to March 2012 Melbourne recorded the lowest level of capital growth in the country.
But Melbourne continues to see low vacancy rates, and it is one of three cities (the others are Perth and Canberra) to record a fall in vacancy over Q4 2011.
The Melbourne CBD vacancy rate is low compared to the other major Australian cities, but CBRE says there is a risk of oversupply given the volume of projects in the pipeline.
CBRE says Melbourne remains a buyer’s market.
The report says the prestige sector, with houses priced over $3 million, has been under the most pressure. The sector continues to see long selling periods and most buyers in this space are overseas purchasers.
Melbourne house capital growth and rental yield: