Liam McNally
The property market in Melbourne’s west is performing better than the rest of the city amid a sharp drop in property prices across the nation, according to latest CoreLogic data.
According to CoreLogic, nationwide property values hit a record decline of 8.4 per cent on January 7, from a peak in May 2022.
CoreLogic said this is due to record-breaking interest rate rises, along with inflationary pressures and high levels of household debt.
In 2022, property values in Melbourne decreased 5.1 per cent, with some of the steepest declines coming from suburbs with higher median values.
Melbourne’s western suburbs have been more resilient to the volatility. Wyndham and Melton-Bacchus Marsh were the highest-performing areas in greater Melbourne outside of the CBD with declines of 0.4 and 1.6 per cent respectively.
CoreLogic research director Tim Lawless said that the stability of prices in the west is because of more affordable markets.
“It’s a fairly common phenomenon where the top end leads the market, it seems to be that homeowners or prospective buyers across that upper end of the market get more sensitive to changes in the environment like interest rates or credit tightening policies,” he said.
“We are seeing a deflection of demand toward that middle and lower end of the pricing spectrum, which is helping to support demand to some extent around your mortgage belt areas like Wyndham and Melton.”
Mr Lawless said that homeowners in Melton and Wyndham are still in a “very strong equity position” compared to other areas, but that we are in a “buyer’s market”.
“A lot of these markets have seen pretty reasonable growth over the long term, it’s really just the last 12 months or so where we’ve seen this downward pressure,” he said.
“For that stock that is on the market it’s generally taking longer to sell and vendors are having to discount their prices by a larger margin. So buyers can take their time, there’s not a great deal of urgency in the market anymore, and they can negotiate quite hard.”
