Median house price values will bottom out late in 2019 (15% lower than the 2017 peak) and start to increase in 2020. Price decreases in Melbourne have already slowed significantly.
Negative gearing and elimination of capital gains tax reductions will have a negative but variable impact on existing dwelling values. Rents in Victoria have begun to increase, driven by high population growth and reduced levels of dwelling purchase. Reduced dwelling prices and increased rents are increasing yields. The best investments should focus on maximising capital gains.
The current key investment principle is to buy at the bottom of the market. This means that May to December 2019 is a good time to purchase.
Housing market values could reach 2017 peaks in the next 5 years or earlier based on historic trends.
The west of Melbourne will be best placed to secure increased housing values due to major new infrastructure (Westgate Tunnel, Geelong Fast Rail, Western Intermodal Freight Terminal) and the Melbourne Airport Rail Link. In addition, the west of Melbourne has a significant price discount to the south-east of Melbourne which will narrow in the next 5 to 10 years as jobs and professionals shift to the west and north of Melbourne.
