The Melbourne market has staged a remarkable turnaround, transitioning from a struggling market to one showing promise of considerable buoyancy in the near future.
Three months ago we reported the first signs of recovery across Greater Melbourne markets, but our latest quarterly survey of sales activity has provided compelling evidence that Melbourne is now coming back strongly.
The number of locations classified as rising markets has increased five-fold and recovering markets have quadrupled, while plateau markets have halved and the number of declining suburbs has dropped by 67 to just 9.
That’s quite a turnaround.
Overall, the number of suburbs with positive classifications (rising, consistency and recovering) has increased from 98 to 221, while those with negative rankings (neutral, plateau and declining) have decreased from 201 to 80.
The big change has been in suburbs transitioning from declining or plateau markets to recovering ones – i.e. the previous downward trend in sales activity has been arrested, with sales volumes starting to rise again.
At the same time, there has been a big jump in the number of rising markets. Three months ago in our Winter survey, we found only 12 suburbs across Greater Melbourne with rising sales activity. Now in our Spring survey we have identified 58 rising suburbs.
The stand-out market is the City of Melbourne, which is rising on the back of the emerging national trend of buyers opting increasingly for apartments as a lifestyle choice or an affordability measure.
Of the 10 City of Melbourne suburbs in our analysis, seven are rising markets, one is a consistency market and one is a recovering market.
The rising markets include the Melbourne CBD, East Melbourne, West Melbourne and Docklands.
The nearby City of Yarra has four rising markets (Abbotsford, Clifton Hill, Collingwood and Fitzroy) and two recovering ones among the seven suburbs in our analysis.
Collingwood (median prices $1,240,000 and $635,000) has recorded quarterly sales of 48 53 68 80 in the past year, a pattern that shows steadily rising buyer activity in that suburb.
But it’s the outer-ring municipalities perhaps best illustrate the recovery trend in the Greater Melbourne market.
The City of Casey in the far south-east, which previously had many declining suburbs, now has three rising and nine recovering suburbs among 15 suburbs in our analysis, with only one declining suburb remaining.
Growth markets include Botanic Ridge, Doveton and Endeavour Hills.
The neighbouring City of Frankston now has all eight suburbs in our analysis with positive classifications, including six recovering markets.
Outer-ring LGAs in the north and west, including Whittlesea, Hume, Wyndham and Melton, also demonstrate the recovering theme in the Melbourne market.
In the City of Wyndham in the south-west, all eight suburbs in our analysis are now classified as recovering markets. In the City of Whittlesea, eight of the ten suburbs are recovering markets. In the Hume LGA on the northern fringe, the 12 suburbs on our list include nine with positive rankings, including five recovering and three consistency suburbs.
The City of Melton is one Greater Melbourne’s strongest precincts: the 16 suburbs in the survey include five rising, four consistency and four recovering suburbs. Rising markets include Brookfield, Kurunjang and Weir Views.
These are all places with median house prices in the $500,000s – and it’s that affordability relative to the Greater Melbourne median price of over $900,000 which is underpinning demand in these locations.
Middle market precincts doing well include Whitehorse, where the 16 suburbs in our analysis include six rising, two consistency and five recovering markets. Box Hill, for example is a rising market and Burwood East stands out for its consistency of quarterly sales.
The Mornington Peninsula, previously a national leader on price growth but past its peak in the last 12-18 months, is showing increasing evidence of recovery. The 16 suburbs in the report include 10 with positive rankings. Sorrento (median house price $2,200,000) stands out with quarterly sales of 16 27 29 33.
The growing trend of buyers opting for units and townhouses, evident in the inner-city municipalities like Melbourne and Yarra, is showing up also in price movements in suburbs across Greater Melbourne.
There’s a long list of locations where the median house price has fallen but the median unit price has risen in the latest quarter – including Bentleigh, Bentleigh East, Black Rock, Burwood, Canterbury, Cremorne, Doncaster East, Essendon North, Glen Waverley, Ivanhoe, Kew East, McKinnon, Mulgrave, Newport, North Melbourne and West Footscray.
In North Melbourne, the median for houses is down 5% to $1,305,000 and units up 1.9% to $550,000 (with the typical unit well under half the price of the typical houses in this suburb, with 64 house sales and 171 unit sales in the past 12 months.
In Ormond in the Glen Eira LGA: the median house price is down 7.8% to $1,705,000 and the unit median is up 3.9% to $610,000 (with the typical unit well under half the price of the typical houses in this suburb – there have been 47 house sales and 71 unit sales in the past 12 months).
All in all, the Melbourne market is well and truly on the way back, with strong trends emerging in specific sectors, demonstrating yet again that there are markets within markets.
Grab the latest edition of our Top 5 Melbourne Hotspots Report – August 2023 now.
