Melbourne market records highest annual growth in seven years: REIV
A record number of sales under the hammer has delivered Melbourne’s strongest property market in seven years, despite modest growth in median prices in the last three months of 2017.
New REIV data shows house prices in metropolitan Melbourne rose for the seventh consecutive quarter in December, up 1.1 per cent to a median of $821,000. This increase boosted the city’s annual price growth to 13.2 per cent for 2017 – the highest since 2010.
REIV President Richard Simpson said price growth in 2017 was undoubtedly bolstered by a buoyant auction market with more than 25 auction records broken.
“While price growth slowed in the December quarter due to increased supply and reduced investor activity, 2017 was a record-breaking year for Melbourne’s property market,” he said.
“High levels of interstate and overseas migration, new Government initiatives for first homebuyers and record low interest rates have contributed to significant double-digit price growth last year.”
TOP GROWTH SUBURBS – DECEMBER QUARTER
| Suburb | Dec-17 Median | Sep-17 Median | Quarterly Change |
1 | $4,600,000 | $3,210,000 | 43.3% | |
2 | SOUTH YARRA | $2,280,500 | $1,799,500 | 26.7% |
3 | $1,200,000 | $1,002,500 | 19.7% | |
4 | SURREY HILLS | $2,285,000 | $1,930,000 | 18.4% |
5 | ESSENDON | $1,715,000 | $1,450,000 | 18.3% |
6 | $2,718,000 | $2,300,000 | 18.2% | |
7 | MALVERN | $2,370,000 | $2,014,000 | 17.7% |
8 | KEYSBOROUGH | $885,000 | $760,500 | 16.4% |
9 | CANTERBURY | $3,300,000 | $2,875,000 | 14.8% |
10 | ROSEBUD | $624,000 | $552,000 | 13.0% |
Top performing suburbs in the December quarter were almost exclusively located at the premium end of the market and included Toorak, South Yarra, Surrey Hills and Canterbury.
“Demand for houses in the city’s most exclusive suburbs continues to outstrip supply, with increased competition delivering exceptional results for vendors in these areas.”
The affordable end of the market also performed well in December with the median house price in the outer suburbs increasing 2.4 per cent over the quarter to $666,500.
“Increased participation from owner-occupiers is driving values in the city’s outer suburbs, with these areas offering buyers the ideal combination of affordability and space.”
“Strong price growth over the past year has meant that houses within 20km of the CBD are almost out of reach for many first homebuyers. These buyers are now looking for new entry points to the market, especially in established suburbs with infrastructure, amenities and services.”
Melbourne’s apartment market rebounded in December with the citywide median price increasing 1.2 per cent to $594,500.
Simpson added that regional Victoria had also experienced its strongest property market in recent years with house prices up 2.6 per cent in the December quarter to a record high $396,500 – an annual increase of 10 per cent on the same period last year.
“Regional cities and towns within commuting distance of the CBD have certainly benefitted from strong price growth in Melbourne with a number of these areas now recording median house prices higher than those in the outer ring.”