Australian homes in Melbourne are unlikely to appreciate much in value over the coming years as a lack of immigration and less demand put a cap on the region's property growth, it has been claimed.
The Real Estate Institute of Victoria (REIV), in its State of the Victorian Property Market report, noted that a lack of first-home buyer demand is a major factor in slowing down growth.
This tends to reduce market liquidity and prevent people elsewhere in the market from moving house, the organisation explained.
One factor in the lack of first-home buyers on the market could be the Victorian's government decision to remove its tax break for this demographic.
"Low rates of economic growth in Victoria, coupled with lower population growth and with almost no unmet demand, underpin at best moderate growth in the medium term," said REIV communications manager Robert LaRocca.
This could also be related to the two-tier system indicated by BIS Shrapnel recently, whereby more growth is taking place in resource-rich states such as the Northern Territory.
Posted by Steve Douglas
