Melbourne apartment insights: What happened to Melbourne apartment values in November?
Melbourne apartments values continued to show their resilience over 2021, with a further 0.5 per cent growth in November, CoreLogic's monthly Hedonic Home Value Index found.
Melbourne's rolling quarterly gains are now at 1.7 per cent, following a one per cent gain over October and 0.2 per cent growth over September.
The median apartment value across Melbourne is now 8.4 per cent higher than it was at the start of 2021, up from $576,000 to $626,000
Based on median values, capital city houses are now 37.9 per cent more expensive than capital city units – the largest difference on record. In dollar value terms, a capital city house is averaging around $240,500 more than a capital city unit.
In Sydney, where the gap between house and unit values is the widest, a house costs $523,000 more on average than a unit. Melbourne's gap is around $360,000.
Although values are continuing to rise, the November result was the softest outcome since January when values rose 0.9 per cent.
Tim Lawless, CoreLogic’s research director, says the slowdown in the pace of growth is due to a number of reasons.
“Virtually every factor that has driven housing values higher has lost some potency over recent months. Fixed mortgage rates are rising, higher listings are taking some urgency away from buyers, affordability has become a more substantial barrier to entry and credit is less available," Lawless noted.
“With such a large value gap between the broad housing types, it’s no wonder we are seeing demand gradually transition towards higher density housing options simply because they are substantially more affordable than buying a house."
Apartment rents in Melbourne continue to rise at a faster pace than house rents over the past four or five months, one of the few capital city's to be doing so, as investors become more and more inclined to get back in to the inner-city market.
“Melbourne’s unit sector was previously recording the weakest rental conditions of any capital city, with rents plunging -8.5% between March 2020 and May 2021," Lawless said.
"It seems that more tenants are taking advantage of the renewed affordability of unit rentals, especially across inner city precincts where rents had previously fallen sharply."