Melbourne's Darebin in hotspot recovery mode: Hotspotting's Terry Ryder

Melbourne's Darebin in hotspot recovery mode: Hotspotting's Terry Ryder
Melbourne's Darebin in hotspot recovery mode: Hotspotting's Terry Ryder


Melbourne has negotiated the difficult post-boom correction phase and is now clearly in recovery mode.

The turn-around in overall fortunes in the Melbourne metropolitan area since the middle of 2019 has been characterised by a noticeable improvement in auction clearance rates and recent evidence of a revival in price growth.

Many Melbourne suburbs still have median house prices below the levels of 12 months ago, but in the most recent quarter their medians have risen.

And the latest generalised data for Melbourne suggests the city overall now has pricing levels higher than a year ago. SQM Research has Melbourne houses up 2% in annual terms, while CoreLogic reports a rise of about 1%. Both those sources report solid rises in latest month, both for houses and for apartments.

A standout feature has been the resilience of suburban unit markets in 2019: many Melbourne suburbs have recorded substantial decreases in their median house prices but rises in their median apartment prices.

The official statistics show that first-home buyers overall are more active now than at any time in the past eight years - and many young adults opt for the apartment lifestyle, rather than a house on land - and not just because it’s cheaper.

So demand for affordable apartments stayed relatively strong in 2019 at a time when demand for houses was weak. 

The price differential - in many Melbourne suburbs the median price for apartments is roughly half that for houses - has been a factor.

But demographic factors have also been influential. Not only do many young adults prefer apartments, but downsizing retirees are buying units and townhouses, while migrants flooding into Melbourne are often coming from cultures where attached dwellings are the norm.

For all these reasons, many apartments markets in suburban Melbourne have remained solid during the post-boom correction - and look poised for further growth.

At the same time, there has been strong demand for houses in good suburbs, but listings have been low.  Despite the onset of Spring and the increasingly positive market news in mainstream media, vendors have been strangely reluctant to come to the party. The downturn in the construction of new dwellings has been an additional factor.

The imbalance between supply and demand has been a factor in lifting clearance rates and median prices - and many forecasters are tipping strong performance in 2020.

SQM Research’s Louis Christopher in his Boom and Bust report, is forecasting price growth of up to 15% for Melbourne in 2020. SQM’s growth predictions for 2020 are modelled on different scenarios of what might occur over the next 12 months, based on changing market fundamentals and controls.

The base scenario – which would keep the cash rate unchanged at current lows of 0.75%, no intervention from banking regulator APRA, a recovering economy and a healthy Australian dollar – sees property prices rise 7% to 11% nationally through 2020.

But Melbourne is expected to exceed this with price growth of 14-15%, taking property values to new highs.

Other forecasters, including Commonwealth Bank and HSBC, are also tipping significant growth in major Australian cities in 2020, with Melbourne at the high end of the growth list.

In making selections for Hotspotting’s new edition of Top 5 Melbourne Hotspots, I have highlighted areas that have shown resilience during the downturn, have offerings that are affordable to mainstream buyers and have solid credentials for long-term, sustainable price growth.

The Darebin LGA precinct provides a good example: it has suburbs that continue to evolve through gentrification in good locations, with attractive proximity to the CBD and other big employment nodes.

Houses are relatively affordable and apartments particularly so. Vacancies are very low, as rental demand is consistently strong, and long-term capital growth rates are good. Yields are above average for Melbourne.

Similar arguments could be made for The Moreland and Moonee Valley municipalities which also feature in the new edition of our Melbourne report.

Brimbank and Wyndham make up the top five.

Overall, it’s a good time to be considering real estate investment in Melbourne and we expect 2020 to be a vibrant year for markets in the Victorian capital.

Terry Ryder is the founder of


Terry Ryder

Terry Ryder

Terry Ryder is the founder of

Terry Ryder Melbourne

Community Discussion

Be the first one to comment on this article
What would you like to say about this project?