Melbourne's best capital growth suburbs: RP Data's weekend Melbourne auction preview

Analysis of changes in the median value of houses in suburbs within 20 kilometres of the CBD over the medium-term shows some interesting trends.

In order to smooth out some of the volatility present in the short-term this analysis focuses on median value growth over a five year period.

The data shows that owners at a range of price points and locations have recorded very healthy increases in value. There are three suburbs with median values in excess of $1 million in the top 10 list based on median value growth over the past five years. These three suburbs, Hawthorn East, Middle Park and Ashburton have all recorded a rise in median values of more than 45% over the five years to May 2014.

Hawthorn East tops the list with an increase of 78% over the past five years, but is followed by a much more affordable location in second place. Watsonia recorded a 63% rise and with a median house value less than a third of Hawthorn East, this shows good capital growth can be found at a range of price points.

Third on the list is Derrimut, however as a growth suburb underlying values are driven by new home development across the suburb.

Fourth on the list is Pascoe Vale South with a 54% rise. It is a suburb which is undergoing significant change and is seeing values boosted by the good transport options and well-sized blocks.

Other suburbs on the list can be seen below but it is worth highlighting Northcote, as it is representative of the gentrification underway in the inner north of Melbourne.

Melbourne Auction Market preview for week ending 20 July

There are 590 auctions scheduled this week in Melbourne compared to 519 for the same time last year. The highest number of auctions is expected in the northern suburbs where 16 are expected in Reservoir.

Seasonally low volumes are not only a factor in the auction market with the overall level of new listings also being lower than a year ago. In Melbourne there were 4.9% fewer homes listed for sale over the last month and 8.8% fewer homes overall on the market.

Fewer homes on the market than a year ago is a positive sign, especially from a sellers’ point of view, however the lower number of new listings may put pressure on prices if it persists and buyer numbers remain at current levels

The average time on market for houses sold last month rose slightly from 40 to 41 days. Similarly, vendor discounting increased from -5.3% the previous week to -5.4% last week.

Key data

• Clearance rate week ending 13 July: 66.4%
• Melbourne auctions expected week ending 20 July: 590
• Melbourne private sales time on market week ending 13 July: 41 days (houses)
• Melbourne vendor discounting market week ending 13 July: -5.4% (houses)
• Listings being prepared for market are 1% lower over the month ending 13 July (seasonally adjusted)