Melbourne property market treads water in September quarter but seeds sown for recovery: REIV

Larry SchlesingerDecember 8, 2020

The Melbourne property market tread water over July, August and September with house prices rising 1% and unit prices falling 0.7%, according to the latest data from the Real Estate Institute of Victoria (REIV).

In the September quarter, the Melbourne median house price increased from a revised June quarter median of $525,000 to $530,000 while unit prices fell from a median $445,000 to $442,000.

The previous unrevised June quarter median was $535,000.

REIV CEO Enzo Raimondo says once consumer confidence returns, capital growth will return.

Currently though, he says, prices remain stable as home buyers and sellers continue to act cautiously.

“The pattern this year has been low transactions and prices at the level they were in early 2010,” says Raimondo.

“A combination of lower interest rates, lower prices, an improving clearance rate and small improvements in consumer confidence should sow the seeds of a recovery in the residential housing market.”

Inner Melbourne Median Prices
House PricesSep-12 Quarter% chg to last qJun-12 Quarter% chg to quarter last year
Original$830,000-3.3%$858,250-2.4%
Seasonally adjusted$832,089-1.0%$840,196-3.7%
Trend$834,211-0.4%$837,646-3.6%
Unit and Apartment PricesSep-12 Quarter% chg to last qJun-12 Quarter% chg to quarter last year
Original$486,000-1.8%$495,000-2.8%
Seasonally adjusted$487,6310.0%$487,533-2.8%
Trend$487,248-0.2%$488,157-2.9%
Middle Melbourne Median Prices
House PricesSep-12 Quarter% chg to last qJun-12 Quarter% chg to quarter last year
Original$585,2500.0%$585,000-1.6%
Seasonally adjusted$590,5351.5%$581,986-1.7%
Trend$589,7051.0%$583,673-1.8%
Unit and Apartment PricesSep-12 Quarter% chg to last qJun-12 Quarter% chg to quarter last year
Original$465,0001.1%$460,000-1.4%
Seasonally adjusted$461,3350.1%$460,653-2.3%
Trend$461,8740.6%$459,161-1.9%
Outer Melbourne Median Prices
House PricesSep-12 Quarter% chg to last qJun-12 Quarter% chg to quarter last year
Original$422,0000.0%$422,000-1.9%
Seasonally adjusted$426,6171.3%$421,162-1.0%
Trend$426,2890.9%$422,649-1.0%
Unit and Apartment PricesSep-12 Quarter% chg to last qJun-12 Quarter% chg to quarter last year
Original$346,500-2.4%$355,000-1.0%
Seasonally adjusted$347,861-1.8%$354,205-0.8%
Trend$350,475-0.3%$351,365-0.6%

The REIV has also, for the first time, introduced seasonally adjusted and trend quarterly data.

Seasonally-adjusted data takes into account seasonal, calendar-related movements while trend data reflects the long term movement of the median price and is considered as the underlying direction of the median price.

REIV spokesperson Robert Larocca says the seasonal data is more applicable to the December and March quarter data, when it will reflect seasonal variations.

“We have a lot more auctions in the December quarter and a lot fewer in March, which means that movement in the median price, in original terms, tends to be overstated in December and understated in March.

“It gives an additional level of analysis."

On a trend basis Melbourne house prices rose 1.8% while unit prices rose 0.8% with the more affordable middle and outer suburbs trending up and the more expensive inner city properties trending marginally down.

“REIV analysis of the market shows prices are beginning to trend upwards, particularly in the middle and outer suburbs. In trend terms the inner city median has dropped by 0.4% this quarter compared to an increase of 1% in the middle suburbs and 0.9% in the outer suburbs,” says Raimondo.

The highest growth was recorded in Thornbury where the median has increased by 11.4% to $750,000, in Yarraville with an 8.8% increase to $615,000 and Preston which recorded an 8.2% increase to $598,000.

The fringe suburbs of Mitcham, Cranbourne, Croydon, Greensborough and Rowville also recorded strong growth in demand and median prices over the quarter.

“Improvements in the middle and affordable price segments are also reflected in the fact that the median price of a house sold at auction dropped by 1.3% to $691,000 whilst one sold by private sale increased by 0.2% to $461,000.

In regional Victoria the median house price rose by a marginal 0.7% to $307,000 but are trending flat (-0.1%) while regional unit prices fell 1.7% in original terms to a median of $242,000 with prices trending down (-0.8%).

The three main regional recorded mixed results with the median price of a house in Ballarat increasing by 1.8% to $285,000, in Bendigo it dropped by 2% in the quarter to $301,000 and in Geelong there was a 6.1% to $362,000.

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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