Melbourne’s real estate market is experiencing significant shifts as property supply rises, leading to falling prices, according to Adviseable.
Government legislation targeting property investors, combined with economic challenges, has fueled these changes, reshaping the property landscape.
Recent government policies, including stricter rental regulations, new taxes, and fees, have contributed to the increased property listings, Adviseable said.
The vacant property tax, designed to discourage property hoarding, has pushed more properties to market as investors offload assets.
In addition, tighter rules for short-term rentals have further reduced investor interest, increasing inventory and flattening prices.
Broader economic issues, such as rising interest rates and inflation, are also weighing on the market.
With higher borrowing costs, many buyers and investors are hesitant to enter the market, leading to weaker demand and a growing property supply. Additionally, construction of new homes has slowed, creating a temporary supply-demand imbalance.
As property prices decline, rental yields are expected to improve, offering better returns for investors who remain active in the market. With fewer new investors purchasing rental properties, the rental market could tighten, potentially driving up competition for tenants and improving yields.
Adviseable said Melbourne’s property market is likely to remain volatile in the short term as it adjusts to new regulations and economic conditions.
However, investors who adapt to the shifting environment could benefit from higher rental income and future market stabilisation. As infrastructure and amenities in key suburbs continue to attract renters, rental demand may remain strong.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
