Why Melbourne’s market is looking healthier than ever
Inner, middle and outer Melbourne have aligned to bring widespread stability to the city’s market for the first time in years.
Not since the June quarter 2021 have both house and unit prices in all three of the Victorian capital’s rings recorded positive quarterly growth, according to data from the Real Estate Institute of Victoria (REIV).
The figures reveal widespread increases throughout Australia’s second-most populous city, with increases driven by the city’s outer suburbs, which saw house prices jump 1.3 per cent and units 1.8 per cent in the three months to September.
Additionally, the city’s 20 top performing suburbs for house price increases over the last quarter were dominated by entrants from its outer fringe, notably Keysborough (up 13.2 per cent), Rye (13 per cent) and Ringwood East (12.2 per cent).
Coastal houses remained in vogue throughout the quarter, led by large median price increases in Crib Point (40 per cent), Somerville (22.3 per cent), Tootgarook (16.8 per cent) and Blairgowrie (17.7 per cent).
A by-product of the city’s widespread growth, suburbs in Melbourne’s east experienced strong price growth in the three months to September, culminating in Upwey entering the million-dollar club with a median house price of $1,060,000.
On the unit front, the Victorian capital’s median unit price climbed 1 per cent during the three-month period to $633,500, with Toorak leading the way regarding price growth, with apartments in the affluent south-eastern suburb jumping 39 per cent to approximately $1.292 million.
Following Toorak’s lead, Bentleigh East, where prices increased 5.6 per cent over the quarter, was the city’s second most expensive unit market with a median price of $1.29 million. Brighton East, Brighton and Glen Wavereley rounded out Melbourne’s five most expensive unit markets last quarter.
Newly elected REIV president Jacob Caine said the results come as no surprise given recent market trajectory.
“As expected, stability has continued into the latter half of 2023, with the quarter showing strong signs of recovery on property prices across Melbourne and regional Victoria,” he remarked.
The state’s regional market, unlike its metropolitan counterpart, experienced no quarterly change in the three months to September, meaning house prices remained firmly at their June median price of $604,500, while units held steady at $416,500.
The institute’s figures are consistent with CoreLogic’s September Home Value Index, which found values in the Victorian capital climbed 0.4 per cent over the month as part of a 1.3 per cent quarterly growth.
Mr Caine believes the data goes to show that “for buyers, this is a good time to enter the market after a period of some uncertainty.”
In addition to rebounding values, Melbourne has experienced a spring surge of auction activity, with over 1,000 homes going under the hammer this past weekend. Moreover, the Reserve Bank of Australia’s decision to enact the fourth consecutive cash rate pause at its October board meeting has filled the market with greater confidence.
“Sellers can feel confident to list and sell their properties as well, with consistent buyer demand,” Mr Caine explained.
“With clearance rates high, we expect this growth is likely to continue over the coming months and into 2024,” he concluded.
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