REIV capitulates

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By Leith van Onselen

The release of the 2012 REIV State of the Victorian Property Market report (below) provides a sobering assessment.

According to the REIV, transaction levels – both private sales and auctions – are well down on the five-year average (see below table).

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Which, given that transaction volumes typically drives prices, suggests that Victorian home prices will remain under pressure (see below chart).

In fact, the REIV sees no capital growth in the short-term and only moderate growth, at best, in the medium-term (see below slide).

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REIV also sees ongoing weakness in the rental market, owing to Victoria’s pending housing oversupply and relatively high rental vacancy rate (see below slide).

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It looks like the REIV has joined the ranks of BIS Shrapnel, which forecasts real price falls of -6% in Melbourne over the next three years.

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REIV State of Victorian Property Market (June 2012)

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.