Victoria has overtaken New South Wales to become the country’s leading property market.
As capital gains across Australia cool off, October saw Sydney dip 0.6% for the quarter, joining the likes of Perth (-0.7%) and Darwin (-4.4%).
But Melbourne has shown more resilience than Sydney, with a capital gains growth of 1.9% for the quarter.
Victoria also saw the most property loans since last quarter, with a growth of 11%.
In addition, data from Comparethemarket.com.au found that Victoria is leading in total funds lodged in residential property transactions in the first quarter of the 2018 financial year.
“The property market is facing a fork in the road, ahead of rising interest rates and in response to a bull run in real estate, as borrowers and lenders respond to tighter lending rules,” said Comparethemarket.com.au’s Abigail Koch.
Koch added that while Sydney plateaus and Melbourne improves there will be plenty of good buying opportunities but also some risk in the market.
She also warned that investors need to be ready for an inevitable rise in rates.
“Property investors need to consider how rate rises will affect their loan repayments and plan accordingly so there are no nasty surprises when their mortgage repayments go up,” she concluded.