Melbourne records annual uptick in house prices despite stock increase: PropTrack Home Price Index
Melbourne house prices have officially gone up for the first time this year after the spring market accelerated the city’s gradual recovery in September, despite an increase in listings.
Property
Don't miss out on the headlines from Property. Followed categories will be added to My News.
Melbourne has recorded its first annual uptick in house prices this year after the spring market accelerated the city’s gradual recovery in September.
PropTrack’s Home Price Index released Sunday shows the city’s typical house rose to $917,000 last month, up 0.24 per cent from August and almost $10,000 from when the market bottomed out in December.
Senior economist Eleanor Creagh said if prices continue to grow at this pace, the city’s median house price could hit $1m by August 2026.
RELATED: Melbourne CBD home to nation’s worst mortgage delinquency rate
Victoria rental crisis: Suburbs considered ‘horrid’ to rent in revealed
Melbourne apartment prices outpacing houses in August — PropTrack Home Price Index
The report shows the year-on-year price growth this September was led by Melbourne’s inner eastern ’burbs, with the region’s typical house price up 3.74 per cent in the past 12 months to hit a whopping $1.424m.
Ms Creagh said areas at the top end of the market were the first to lead Melbourne out of its correction when prices began recovering earlier this year.
“Although I would imagine that over the next year or so, particularly with affordability having deteriorated so quickly, affordable regions will see price growth remaining stronger,” Ms Creagh said.
Despite more stock coming to the market in the past two months, Ms Creagh said the accelerated growth in spring was a testament to stronger demand for housing as a result of repeated interest rate pauses, lower unemployment rates, increased overseas migration and tight rental markets.
“Demand is so far absorbing that new stock coming to the market, even with the surge in listing volumes,” she added.
It comes after PropTrack’s Listings Report last month revealed the number of Melbourne homes for sale surged 24.9 per cent in August in the busiest end to winter in more than a decade.
Ray White analysis shows there was more than 8200 listings across the city in September.
Buyer’s advocate Emily Wallace said the top end of the market had the biggest drop in available stock this year as people held onto family homes and rode the wave of interest rate rises.
“The lower quartile lends itself to investors, which could highlight more distress in the sale,” Ms Wallace said.
She added that affordable markets were benefiting from the current environment, where investors were selling up and more stock had become available for first-home buyers.
“Apartments under $700,000 are highly sought after and the stock for that sector has increased due to investors, mainly those who bought in 2021, selling up,” she said.
PropTrack data shows the price recovery for units continued to outpace houses in September, rising 0.31 per cent to hit a $622,000 median — now up $11,000 from a January low.
However unit costs still remain 3.83 per cent lower than their peak in December 2021.
Ms Wallace said median unit prices were also likely to continue on an upward trajectory, even with extra stock on the market, as a result of the rental crisis and tenants “fed up” with the uncertainty and rising rents.
“The majority of first-home buyers are buying apartments just to get in and provide security so they’re out of the rental trap,” she said.
“This will certainly see a strain on the market and ensure that prices in that affordable market continue to rise. I don't think it would be astronomical, but certainly steady.”
Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.
emily.holgate@news.com.au
First look: New Coast shopping centre for surprise site
A long-empty site in a surprise location will be transformed into a retail showroom complex under fresh plans lodged with the council. FIND OUT WHERE
Revealed: How much rent you need to pay in every Qld suburb
Rents have increased again in 252 Queensland suburbs, reversing the brief downward trend recorded just three months ago. See how your suburb compares!