Pace of property value falls slows in Melbourne, Victoria: PropTrack Home Price Index

The worst of Melbourne’s property downturn “appears to have passed”, with prices continuing to fall but the rate of decline slowing so far in 2023.

The three-bedroom house at 9 Jarrah Court, Greensborough, sold for $939,000 in January.

The worst of Melbourne’s property downturn “appears to have passed”, with prices continuing to fall, but the rate of decline slowing to kick off 2023.

Melbourne’s median property price was $797,000 in January, according to PropTrack’s Home Price Index, marking a slip of 0.22 per cent over the month.

The median house price sat relatively stable at $903,000, while the unit median was $609,000 after a slip of 1.13 per cent.

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The four-bedroom house at 3 Hartland Rd, Vermont South, went to auction last month.

PropTrack economist Eleanor Creagh said the data agency expected the Reserve Bank to raise the cash rate 0.25 per cent next week, but not as far as Deutsche Bank Australia’s concerning forecast of four more 0.25 per cent rises this year.

“The worst of the downturn appears to have passed,” Ms Creagh said.

“A 0.22 per cent decline last month, although the second fastest pace of decline of capital cities, it’s still a significant reduction in the pace of price falls from the plus-1 per cent falls we saw in June and July last year.”

Regional Victoria’s median property price fell similarly in January, -0.23 per cent to $593,000, its house figure -0.25 per cent to $613,000, and its unit figure remained relatively flat at $441,000.

Propertyology managing director Simon Pressley expected the RBA to raise rates twice in their next 11 meetings over the course of 2023 after the sharpest string of rises on record last year.

“What that will enable human emotion to do is to find its balance and regain its confidence and say ‘I’m actually okay’,” he said.

The three-bedroom house at 12 Nymph St, Mitcham, sold for $1.19m last month.

“And then I think in the middle of this year there’ll be an increase in buyer activity and a stabilisation of asset values, probably increasing in the second half of the year.”

Mr Pressley said “meat and potatoes” property had proved resilient amid the steep interest rate hikes and most of the falls had been at the $2 million-plus end of the market.

He said the vast majority of homeowners were well placed to weather rate rises, and a small percentage who bought at the peak of the market would feel the brunt “but that happens all the time”.

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