Are Houses in Melbourne Australia Going Up in Value?

Are Houses in Melbourne Australia Going Up in Value?

It is no secret that Australia has been having a bit of an economic boom lately. This has led many Australian homeowners to question whether or not their property values are going up as well. And, while there are some signs pointing in this direction, it’s too soon to tell if the recent surge will last for long enough to make housing prices rise permanently.

Will Melbourne homes increase in price over time? Here are some factors contributing to home value and why:

1. High Employment Rate

The job market is rather healthy at the moment, which leads many people to believe that this boom will continue. Wages are increasing, leading to an increased purchasing ability. And since consumer spending makes up about 60% of Australia’s economy, this trend will lead to a higher demand for housing.

2. Renting vs Buying

Melbourne is not the only city where it seems like renting is more affordable than buying. The gap between renting and buying in Australia has been expanding since 2012 when the link below was published. As this trend continues, it will put more pressure on the market to increase home values.

3. Interest Rates and Inflation

The Reserve Bank of Australia has kept interest rates low and inflation is at a two-year high – which means that banks can afford to lend out money for longer periods at lower costs. This makes mortgages much cheaper than usual for home buyers, which also will help to increase demand.

4. Inability of the Australian Dollar to Fall Any Further

In late 2012, 1 pound sterling could be purchased for about $1.54 Australian Dollars. And while that combined with other economic factors and a seemingly insatiable appetite in China for Australian natural resources has helped increase the Aussie dollar even further, the demand for Australian dollars is not projected to increase any more than it already has. That means that our currency’s value will be unlikely to rise against other currencies – good news for home buyers.

5. Diversification of Foreign Investment

Although China continues to invest in Australia like never before, Chinese foreign investment in Australia has risen to approximately $6 billion a year. Meanwhile, Japan has been investing almost as much. This means that home values may continue to increase simply because of the rise in foreign investment – which would further benefit from an increase in consumer spending.

6. The Australian Government’s Housing Affordability Scheme

In October 2013, the Australian government introduced a housing affordability package in order to put pressure on the market to increase not only the number of new homes but also existing home values. These incentives included a pilot program that would result in discounts of 15% on capital gains tax for housing investors who held onto their properties for at least a year and reduced development charges for building affordable housing projects.


The housing market in Melbourne, Australia is driven by a variety of factors. Understanding the trends can help you make investment decisions that are more informed and lead to higher rates of return on your money. If you’re looking for a way to save money when selling your home, consider using the Biownr platform. This innovative new platform allows homeowners in Melbourne Australia to sell their homes themselves without having to pay exorbitant real estate agent fees.

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