Affordability remains major issue among Melbourne home-buyers, say CBRE

MELBOURNE: Affordability will remain an issue for the residential market in Melbourne, as the average first-home buyers' loan peaked at over AU$279,000 (RM785,421) in the previous two months from AU$275,000 in February this year, according to CB Richard Ellis (CBRE)’s second quarter 2010 MarketView report on the residential sector.

The report said that first-time buyers’ share of total dwellings financed in Victoria for the sub-AU$500,000 segment of the market has also dropped to just over 22% in February from over 29% in the middle of last year. This dip was caused by the return of the Federal Government's first-home owners grant to their pre-boost levels, the Victorian government’s cuts to the state bonus scheme, and rising interest rates.

These issues go against the fact that the Melbourne residential market has been leading the nation in terms of price- and value-growth since the middle of last year. Median house values in the Melbourne residential market increased 17.7% y-o-y compared to the quarter ending March this year, reaching AU$562,500.

The report also quoted Access Economics, which stated that Melbourne is expected to match the national growth rate of 3.4% per annum from 2010 to 2014 compared to 2.8% per annum from 2005 to 2009.

Access Economics is also forecasting a 5.9% increase in Victorian housing beginning 2010 as the result of better land release, more affordable land and better infrastructure on the outskirts of Melbourne.