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).
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).
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).
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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