Melbourne apartment insights: What happened to Melbourne apartment values over October?
Melbourne apartments values spiked over October, performing as well as the city's house market over the month, according to the monthly Hedonic Home Value Index by CoreLogic.
Apartment values rose one per cent, their highest rise since CoreLogic's May report, when there was one per cent gains over the April
Melbourne's rolling quarterly gains are now at 1.7 per cent, following 0.2 per cent gains over September and 0.5 per cent over August.
Across 2020, Melbourne apartment values were flat, and so far in 2021 they've grown 7.8 per cent, to a new median $621,000. The median at the start of the year was $576,000.
It's another month of gains for Melbourne apartments, which haven't seen a decline in 2021 despite the continued shutdown of immigration due to border closures.
The narrowing gap between house and unit performance comes as house affordability reaches record levels. Over October, that gap only widened across Sydney and Brisbane, with all the rest of the capitals seeing units either perform better, or the same, as houses over the period.
“As housing becomes less affordable, we expect to see more demand deflected towards the higher density sectors of the market," CoreLogic's research director, Tim Lawless, said.
"House prices continue to outpace wages by a ratio of around 12:1," Lawless noted.
"This is one of the reasons why first home buyers are becoming a progressively smaller component of housing demand."
Lawless expects the flick to higher density to occur most prevalently in Sydney than anywhere else in the country. The gap between the median house and unit value is now nearly $500,000. In Melbourne it's around $350,000. Melbourne's house median was $972,000 after the one per cent October gains.
"With investors becoming a larger component of new housing finance, we may see more demand flowing into medium to high density properties," Lawless added.
"Investor demand across the unit sector could be bolstered as overseas borders open, which is likely to have a positive impact on rental demand, especially across inner city unit precincts.”
National rents were up 0.7 per cent in October, roughly equivalent to the September's 0.6 per cent rise.