A rosy picture that has been painted this week about the strength of Bendigo housing market is a contrast to the metrol turmoil.
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Bendigo’s lower median price - in the mid $350,000 range - compared to Melbourne - in the $800,000 - apparently make the city an attractive proposition for those looking to move out of metro areas to get more bank for their buck.
It also means that local housing continues to be affordable for many first home buyers.
But it’s too early to gloat.
As AMP Chief Economist Shane Oliver said in a research report this week: “The positive feedback loop of recent years of rising prices bringing higher demand and further price gains has given way to a negative feedback loop of falling prices leading to reduced demand and further declines," Oliver said of housing. “This could all be made worse if immigration levels are cut sharply” and the numbers of those in the market looking for houses dropped like a stone.
Mr Oliver also suggested the Reserve Bank would cut rates mid-way through next next, and that "banks will likely have no choice to pass the cuts on given the bad publicity not passing them on will generate”. So there could, in the short term, be savings ahead on mortgages. Which is good news.
But predictions have also suggested the overheated Melbourne and Sydney housing markets would lose a further 10 per cent of their value next year.
Whether we’ll see something similar here will depend on a few factors, including whether people continue to move to Bendigo to escape the housing merry-go-round.
Read more: Regional housing still attractive to buyers
The fall in metropolitan prices may, in fact, encourage people who might otherwise have fled to stay. The key to Bendigo’s continued boom will hinge on not only whether the metro prices are still too high, but if people are willing to move away from family and friends – particularly if there is a long commute or no work available in central Victoria – and if immigrants continue to move here.
It’s a waiting game, but don’t count on our market staying buoyant if everything around it is crashing.
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