Melbourne’s housing market is seeing signs of recovery, with home values surging in the past three months. According to new data from PropTrack, median house prices in 84% of Melbourne’s suburbs increased between April and June, despite rising interest rates. The metropolitan median house price rose by $43,000 to $898,000 across the quarter. While medians for only 45 areas rose in the past year, the recent increases suggest that the market decline has changed direction. The recovery is expected to be slow and steady due to a tight supply of properties for sale and cautious buyers who are wary of off-the-plan purchases or building from scratch after recent collapses in the building sector. The recovery is also expected to be moderated by high-interest rates impacting buyers.
Werribee South saw the largest increase in median house prices in the past three months, with a rise of $52,214 to $898,632. The area offers quick access to the beach, local eateries, and attractions such as the Werribee Open Range Zoo and Werribee Park Mansion. Despite the recent increase, Werribee South is still $73,208 worse off than it was in June last year. The area has a shortage of good-quality houses for sale, leading to a tight housing market. Similarly, Mambourin in Melbourne’s west saw a surge in house values, with a median price increase of $28,399 to $637,986. Aspendale in the south also experienced a rise in median house value, increasing by $51,737 to $1,334,189.
Several eastern suburbs, including Doncaster East, also saw higher house values, with Doncaster East reaching a median price of $1,516,158, an increase of $57,046 since three months earlier and $52,607 since last year. The increase in house values is consistent with the broader trend in Melbourne, where prices have been rising since hitting their lowest point in January. The strong demand for homes in Doncaster and Doncaster East is driven by young families and new migrants who are attracted to the area’s amenities, schools, and easy access to the freeway.
Bright, a town in the Alpine Shire, saw the highest growth in house values over the year, with an increase of $136,465 (13.4%) to a median value of $1,158,337. While Bright is a popular holiday spot, owner-occupiers make up the majority of inquiries and purchases, indicating a strong desire to live in the town.
On the other hand, rising land taxes and interest rates have caused some owners to sell their properties in nine Mornington Peninsula areas, making them the worst-performing house values in Melbourne over the past three months.
Overall, the increase in house values in Melbourne suggests a shift from a declining market to a recovery phase. The market is expected to continue recovering slowly and steadily, driven by a shortage of properties for sale and cautious buyers. However, high-interest rates may moderate the pace of the recovery.