Liam McNally
A year of inflation and rising interest rates has created a feeling of uncertainty for Australia’s housing market, but leading Melton construction company Varcon Group believes Melton’s long-term housing affordability outlook is “positive”.
Key to this view is land supply. Across the country new building approvals have dropped 6 per cent in the 12 months to October 2022 according to the latest ABS data, and in October alone approvals in New South Wales and Queensland fell over 18 per cent.
In contrast, Victoria’s approvals rose 5.8 per cent in October.
Varcon Group managing director Michael Ahmet believes Victoria’s rise is due to a mix of returning international immigration, and the Victorian government’s Big Housing Build Initiative.
Mr Ahmet said that the western growth corridor is a big factor in the Victorian statistic.
“We’ve probably got the most greenfield land available at the moment compared to a lot of other estates around Melbourne,” he said.
Nationwide dwelling values have fallen 7 per cent since April according to Core Logic data, but Mr Ahmet believes that as the 7.3 per cent inflation rate takes its toll on building costs, prices will rise again.
He said that between inflation and rising interest rates a lot of people have “got about 12 months work ahead of them”.
“It’s going to make things a little bit harder, especially for first home buyers entering the market, no doubt about it.
“The west is probably one of the hardest hit areas by inflation rates because of the demographic of people that are up here. There’s a lot of first home buyers in the west, especially in Melton.”
Mr Ahmet’s outlook is still positive for the area. He said the “abundance” of land in Melbourne’s growth corridors is causing competition between estates, placing downward pressure on house prices.
“The west is still one of the most affordable areas to live in compared with other parts of Melbourne, and Melton in particular, purely because of the supply of land and the supply of properties that are available,” he said.
“Things will come around. We’ve just got to ride this bit of a wave for 12 to 18 months and things will be good.”
