You can’t always judge a suburb by its median sale price: RP Data's Melbourne auction preview

You can’t always judge a suburb by its median sale price: RP Data's Melbourne auction preview
Robert LaroccaDecember 7, 2020

Around one in 10 of all residential home sales in Melbourne transact for more than $1 million and most are concentrated in the inner east and south-east.

Such is the concentration that it is very hard to find a suburb with a median house price of under $1 million along the length of Burke Road.

That is of course no surprise to anyone who follows the local market.

More surprising is the suburbs with million dollar sales in the outer suburbs. For this exercise outer’ includes those suburbs that are 20 kilometres or more from the CBD.

In those areas, the outer suburban million dollar market is most concentrated in the Mornington Peninsula and in the Kingston council area.

A common theme in these suburbs is the proximity to the bay and its associated recreational options.

The highest prevalence was in Mount Eliza where 83 homes have sold for over $1 million in the past year, 10 of which were sold for more than $2 million. Mount Martha, which shares many of the same attractions recorded 48 sales at or in excess of $1 million, almost one a week. The median sale price in Mount Eliza was $775,000 and in Mount Martha it was $620,000.

As you travel further south there are a range of other suburbs that recorded more than 10 sales above the $1 million mark including Sorrento, Mornington, Safety Beach, Rye and Blairgowrie. Obviously like Mount Eliza and Mount Martha the majority of homes in all of these suburbs sell for well under a million dollars so the data shows that, due to the location within the suburb, a different group of buyers is active.

Clearly you cant fully judge a suburb by its median sale price.

This is also the case in the City of Kingston, in Mentone, Parkdale, Patterson Lakes and Mordialloc where between 24 and nine $1 million sales occurred in the last year. With the exception of Patterson Lakes these sales will mostly be in the section of these suburbs between the Nepean Highway and Port Phillip Bay.

The positive impact of the bay on property values extends to Frankston as well where 13 sales in excess of $1 million were recorded in Frankston South and eight in Frankston.

Other areas that saw these sales at the very top end of the market were Eltham, Mitcham and Vermont.

There are 658 auctions scheduled this week in Melbourne compared to 668 for the same time last year.

The growth in the volume of homes being listed for sale in Melbourne has slowed following a strong first half of the year.

A range of data available which highlights the moderate, but not strong, nature of the Melbourne market. The most recent of this is the settled sales so far for this year. It shows transactions have only risen by 5% compared to 2013 and remain 18% below the peak of 2007. On current numbers the total number of residential sales in Melbourne is projected to be between 85,000 and 87,000 compared to 82,495 last year and 72,757 in 2012. Remarkably the proportion of homes sold at auction is 35% higher than last year.

Time of market results for houses sold at private sale contracted from 46 days to 43 days over the last week whilst vendor discounting rose from -5.1% to -5.3%. This reflected a largely stable market for houses at private sale.

Key data

  • Clearance rate week ending 10 August: 69.6%
  • Melbourne auctions expected week ending 17 August: 658
  • Melbourne private sales time on market week ending 10 August: 43 days (houses)
  • Melbourne vendor discounting market week ending 10 August: -5.3% (houses)
  • Listings being prepared for market are 2.7% higher in month ending 10 August (seasonally adjusted)

Robert Larocca

Robert Larocca is Victorian housing market specialist for CoreLogic RP Data.

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