"Chinatown"-Official media of Chinese Australians
Melbourne's housing market is rapidly approaching a bubble, and home buyers should wisely consider whether their money is being spent on the blade.

Due to the fierce competition among buyers and the still low interest rates, transaction prices in Melbourne's real estate market have repeatedly hit record highs.

The current situation is very attractive to buyers, and buyers are becoming more and more active in the housing market this year. However, only a small percentage of buyers are first home buyers. Most of them are families who wish to change their large houses to small houses or buy a second property.

Low interest rates have led to a sharp increase in cash purchases, leading to a shortage of existing homes, and thus pushing up housing prices. It's no surprise that Melbourne house prices keep hitting record highs.

In Caroline Springs, with a median house price of A$456,000, a house recently sold for a high price of A$159 million, which surprised investors on the sidelines. And in Highett, a rudimentary renovated house successfully changed ownership at a price exceeding the reserve price of A$20-A$155 million. In Brunswick, a penthouse on Dods St sold for a record price of A$129 million, exceeding the reserve price of A$275,000.

In this rising market, many buyers are trying to buy the best real estate in their affordable range-buy it quickly, wait a month longer and the house will be more expensive.

The biggest risk for home buyers is to assume potential debt. The rule of thumb is, if you can afford a 7% mortgage, then buy it. If you can't afford it, forget it.

What buyers must remember is that the housing market will not prosper forever. History has confirmed this-after all, in the past 20 years, the Melbourne housing market has experienced three downturns.

First home buyers and households that continue to "expand" need to consider the long-term value growth of their assets and their ability to afford loans after interest rate hikes in the future.

Low interest rates create demand and increase the affordability of home buyers, but in any market, pressure is needed to drive sales. Based on current trends, sellers do not have much pressure to sell houses.

Low pressure, low interest rates, low unemployment, and rising consumer confidence have led to a shortage of listings, and sellers are watching.

Smart and experienced investors will understand this and use long-term benefits as a guide for decision-making.

Article reproduced from Sydney Today


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