Melbourne's median falls in December quarter: REIV

Melbourne’s median price has moderated following four successive quarters of growth, providing positive news for house hunters in 2016.

The median price fell marginally in the December quarter – down 0.1 per cent to a median house price of $718,000 – following solid growth of 4.5 per cent in September. 

REIV Chief Executive Officer, Enzo Raimondo, said a high proportion of sales in Melbourne’s outer ring in the last quarter of 2015 had assisted in stabilising the housing market. 

“Melbourne’s outer suburbs saw the strongest capital growth in the December quarter, up 2.9 per cent over September figures,” he said.

Suburbs in the city’s outer north east dominated the list of top growth suburbs with Warrandyte recording growth of more than 19 per cent - rejoining the million dollar club with a median house price of $1,030,000.

The graph below depicts median house and unit prices in Melbourne over the past decade in seasonally adjusted terms.

Click to enlarge

*All quarterly median prices are seasonally adjusted and quarterly. Annual change is based on rolling annual figures.

Greenvale and Sunshine were also strong performers in December, up more than 17 per cent over the previous quarter. 

“Eight of the top 20 growth suburbs have a median house price below $600,000 and six of these are below $520,000. The median house price in Werribee increased more than $30,000 in the December quarter to $357,000.

“This level of growth in areas that are traditionally seen as affordable suburbs indicates buyer demand for space and affordability.”  

“Improved infrastructure in the city’s outer ring, including rail links and upgraded roads, are really boosting prices in these suburbs.” 

Mr Raimondo said there had been a distinct shift away from more expensive Melbourne suburbs with buyers now looking at emerging growth areas. 

“Demand for suburbs in Melbourne’s middle ring ebbed this quarter, as buyers sought  value further from the city’s CBD.” 

He said the city’s moderating housing market represented good news for those looking to get a foothold on the property ladder. 

“While 2015 was a remarkable year for vendors, a moderating market favours buyers with more room for negotiation,” he said. 

Meanwhile, suburbs in Melbourne’s inner ring continued to perform well at the end of 2015 with the median house price reaching $1,252,000 for the first time – a 1.3 per cent quarterly increase. 

Widespread growth was also recorded for units and apartments, up 1.6 per cent across the city to a median of $537,500. 

Regional Victoria was the state’s main growth driver in median prices in the December quarter, outstrippingMelbourne.

REIV data shows house prices in regional Victoria rose 2.2 per cent in the last three months of 2015 to a median of $353,000, up from $345,500 in September. 

The price of units and apartments also increased in December, up 2.3 per cent to a median of $268,500.

Meanwhile, growth in Melbourne moderated with the median house price down 0.1 per cent in December to $718,000.

REIV Chief Executive Officer, Enzo Raimondo, said price growth in regional areas appeared to be driven by willingness by city dwellers to live further from the Melbourne CBD and commute - and by a new trend, with city dwellers migrating from Melbourne to live full-time in country areas.

“We’ve seen prices in major regional areas within 90 minutes of Melbourne grow in price, suggesting city commuters are looking further afield for lifestyle and value reasons,” he said.

“Many regional centres within commuting distance of Melbourne are increasingly sought-after by those priced out of the Melbourne market.” 

Mr Raimondo said a further, interesting trend is for price growth in towns and cities further from Melbourne, in the most recent quarter.

“We’ve seen growth in larger regional centres further from Melbourne in the final few months of 2015.”

These include Bairnsdale, Echuca, Swan Hill, Mildura and Warrnambool, he said.

“This latter trend is more likely being driven by homebuyers looking to migrate to regional areas to work or retire in regional Victoria, with many seeking to swap the city for the more relaxed living in the regional and rural areas.”

Melbourne’s median price has moderated following four successive quarters of growth, providing positive news for house hunters in 2016.

The median price fell marginally in the December quarter – down 0.1 per cent to a median house price of $718,000 – following solid growth of 4.5 per cent in September. 

REIV Chief Executive Officer, Enzo Raimondo, said a high proportion of sales in Melbourne’s outer ring in the last quarter of 2015 had assisted in stabilising the housing market. 

“Melbourne’s outer suburbs saw the strongest capital growth in the December quarter, up 2.9 per cent over September figures,” he said.

Suburbs in the city’s outer north east dominated the list of top growth suburbs with Warrandyte recording growth of more than 19 per cent - rejoining the million dollar club with a median house price of $1,030,000.

Prices for regional Victoria are also available.