Melbourne home prices remain flat due to thousands of sales in November | PropTrack Home Price Index

A surge in spring home sales and increased auction action has seen thousands of homes change hands over the past month. But what has that meant for Melbourne’s home prices?

A spring home sale surge with thousands changing hands in November has stalled Melbourne’s property price recovery.

The latest PropTrack Home Price Index released today shows Melbourne’s $917,000 median house value gained less than $500 (0.03 per cent), while the state’s typical $625,000 unit fell $180 (0.02 per cent) in the past month.

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The stall is a glimmer of hope for those hoping to buy in the new year, with house prices idling part way through a recovery.

They have now regained about $17,000 (1.94 per cent) since prices bottomed out in December last year, but are still $37,000 (3.94 per cent) below their last peak in March 2022.

16 Lauriston Court, Cheltenham went under the hammer in November, before passing in and selling afterwards for $960,000.

PropTrack senior economist Eleanor Creagh said while it was possible the last rate hike had dented confidence, it was much more likely a busy run of home sales in November had given buyers choice and kept values from increasing more substantially.

With more than 3300 auctions expected across December set to continue those conditions, growth is expected to remain flat until at least Christmas, despite strong demand for housing, record-low rental vacancy rates, declining new home completions and rising population figures.

PropTrack senior economist Eleanor Creagh did not believe there would be a rate hike next Tuesday.

“It’s likely you will have continued slower growth with that increase in choice,” Ms Creagh said.

“If we do see continued interest rate rises in February next year we could see headwinds.”

However, the economist said she did not believe there would be a rate hike next Tuesday or even in February when the Reserve Bank’s next meets.

The 13 increases so far have already had an impact on the market, with house and unit price gains neck and neck for the year to date at just over 1.9 per cent.

24 Birdwood Court, Doreen also sold in November for $670,000.

Ms Creagh said this was quite unusual as house values typically outpaced unit prices, but pressure on tenants to escape the rental market and constrained borrowing capacity could be driving more buyers towards smaller homes.

Real Estate Institute of Victoria president Jacob Caine said while there had been apprehension buyers would baulk after last month’s interest rate hike, the fear of a potential further move by the RBA had won out.

“From a buyer’s perspective there’s a question of ‘what’s my buying capacity after Christmas’ and, if they are looking at the potential of not being able to buy before February, they know the landscape may have changed even more,” Mr Caine said.

“So I would be saying to everyone, get yourself the best possible Christmas present and get it now. Because the prices right now are likely to be as affordable as they are going to be.”

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