State of Markets – VIC February 2012

VICTORIA

VIC investor activity jumps
First time buyer and investor demand for mortgages surged in Victoria during November, according to AFG.

Property investors accounted for almost two out of every five mortgages sold that month – an all-time record for the AFG Mortgage Index, which goes back six years.

Investors were recorded as most active in New South Wales (44.6 per cent) and Victoria (39.8 per cent).

Data from AFG found more than $2.9 billion of mortgages were processed that month, the highest such figure since March 2009.

Growth was particularly strong in Victoria, where mortgages processed leapt by 26.7 per cent.

AFG general manager of sales and operations Mark Hewitt said, “We’re experiencing the paradox that weaker global economic conditions and lower rates, is good news for Australian property buyers – at least for now. It’s significant that investors and first home buyers are leading the action.

“Many had been fearful that we were locked into a scenario of constant rate hikes. The November 2011 rate cut proved to be a real turning point and the outlook is very different now.”

Vacancy rates ease in Melbourne
Melbourne metropolitan vacancy rates are on the rise, according to the Real Estate Institute of Victoria (REIV).

In October, the vacancy rate reached 3.1 per cent, the first time it has exceeded three per cent since January 2006.

This is a 0.7 per cent increase on September 2011 figures.

The REIV said the change was due to an easing in the rate of population growth in Victoria, and with dwelling construction increasing, this has also helped to increase supply.

The vacancy rate in the outer suburbs is reported as remaining tight (1.8 per cent), while in the middle and inner suburbs it sits at 4.1 and 2.2 per cent respectively.

Regional Victoria has the tightest vacancy rate at 1.3 per cent, a drop of 0.3 per cent.