PropTrack reveals which Victorian towns’ and suburbs’ homes made and lost money in 2023

House prices grew faster than Australia’s average income in dozens of Victorian suburbs and towns last year. See if your neighbourhood was one of them, and what experts expect in 2024.

Wheelers Hill homeowners Rick and Cristine Castricum have loved living in the suburb, and are thrilled, though unsurprised, to see it named as one of Melbourne’s top performing property markets in 2023.

House prices in more than 50 Victorian suburbs outearned the average national income in 2023, with some surging six figures despite experts predicting an up to 10 per cent fall.

Agents in some of Melbourne’s best performing suburbs believe increasing migration, particularly from China and India, was a key factor behind the growth.

Despite dire forecasts the city’s property market would follow struggling mortgage payers over an interest rate cliff last year, PropTrack’s latest quarterly data shows median house values rose in 218 suburbs, 53 per cent of those assessed, across the past 12 months.

RELATED: Banks could have collected half Melbourne’s home value growth in 2023

PropTrack: the Melbourne suburbs where homes are snapped up in just 15 days

Victoria’s top 50 homes for 2023 revealed

Statewide there were rises in 253 suburbs and towns, and with latest Census data putting the nation’s average annual individual income just below $42,000, house prices trumped that figure in 54 Victorian localities.

Seven Melbourne suburbs even posted gains above $100,000 to eclipse the state’s $91,500 average income.

Top performers included Balwyn, where house values rose almost $200,000 (7.36 per cent) to just under $2.904m, and Wheelers Hill, up almost $88,000 (6.72 per cent) to $1.393m.

Ray White Ferntree Gully’s Cristine Jones said suburbs around Wheelers Hill had benefited from word of mouth among new migrant communities, particularly from China and India, as well as others relocating from more affluent western suburbs like Point Cook.

These buyers were then competing with others who valued the quality of education on offer at schools in Melbourne’s east, driving prices up.

“Early in the year in particular prices just felt like they were sky rocketing,” Ms Jones said.

“But there wasn’t a lot for sale in the area, last year and very few family homes were being offered.”

Vermont South, home to Pin Oak Court (better known as Ramsay St), was the city’s third strongest for growth in percentage terms with a 6.45 per cent uptick adding $89,000 to house prices and bringing the local median to about $1.476m.

6 Austin St, Balwyn, sold for $2.97m and shows what a typical home near the suburb’s median house price looks like.

But a median is just the ‘middle’ value for the suburb, and homes can and do sell for significantly more — such as 7 Palmer Ave, Balwyn, which made $3.4m late in 2023.

PropTrack economist Paul Ryan said “the big story for 2023 was the resilience of the market”.

“We weren’t expecting the numbers to grow and we saw that across most of the city,” Mr Ryan said.

But with Melbourne inner, outer and south east dominating the best performing suburbs lists in 2023, he concurred that school zones would have been a key factor.

“And Neighbours being renewed couldn’t hurt (Vermont South), given all the attention it’s brought,” Mr Ryan said.

“But, also, looking at the price points here, there’s signs of upgrading activity which is usually around family homes.”

18 Warrington Ave, Vermont South, is pretty close to a typical home for the suburb and sold for $1,488,888 late last year.

A typical Forest Hill home at 4 Teal Court sold for $1.167m in 2023.

He added that while there were positive signs Melbourne house prices would broadly continue to grow in the months ahead, an increase in listings early in the year or an interest rate hike in February could result in decreasing values.

Mr Ryan said a surge in spring listings and a rate hike in November were both part of the reason why home values had fallen in 327 Melbourne suburbs over the final three months of 2023 — though not enough to offset gains earlier in the year.

Across the full year, home values fell in just 189 suburbs.

Many of these were along the Mornington Peninsula, including the four hardest hit: Rosebud, McCrae, Capel Sound and Tootgarook.

12 Warraburra Ave, Rosebud, sold for $770,000 in December last year – close to the suburb's median house price.

Mr Ryan noted that many coastal areas had outperformed during the pandemic and were now correcting as a result, but flagged it was also possible increases to land tax bills and new taxes for holiday homes implemented this year could have dampened demand in those areas last year.

Conditions were tougher outside of Melbourne, with 180 of the 215 assessed regional suburbs and towns incurring a reduction in their median house value — headed by Avoca in the state’s central highlands, where prices fell by $33,000 (1.98 per cent) to about $378,000.

It was much closer to the anticipated 7-10 per cent home price condition forecast by PropTrack for last year.

Beechworth, east of Wangaratta, topped the 35 towns where figures rose, with the median house price up $66,000 (9.25 per cent) to $787,000.

451 Buckland Gap Rd, Beechworth, sold for $525,000 in November, well below the suburb’s surging $787,000 median house price.

With major regional hubs including Ballarat and Geelong among those with prices falling, Property Home Base founder and flat-fee buyer’s agent Julie DeBondt-Barker said she had been surprised to see first-home buyers eschewing them and being more “fussy” in spring.

Ms DeBondt Barker noticed a similar occurrence in some of Melbourne’s most affordable suburbs including Melton and Broadmeadows, which lost ground in the final three months of 2023.

But she warned wannabe buyers didn’t have long to “wait and see” what happened with interest rates as investor inquiry in the $500,000-$600,000 price bracket was now significantly higher than from those hoping to break into the market.

After an initial “lull” in the next few months, the advocate said a rate cut later in 2024 would be a “trigger” to price rises that would quickly outpace improvements to borrowing capacity.

THE VIEW FROM THE TOP

Wheelers Hill's locals Rick and Cristine Castricum have raised three sons and even had their granddaughter Leilani born in their 10 Trafford Court home. Picture: David Smith.

Rick and Cristine Castricum were unsurprised to see Wheelers Hill as one of Melbourne’s top performing suburbs last year.

After moving into their 10 Trafford Court house in 1997 they’ve watched the street and neighbourhood gentrify as a constant stream of new families have homed in on the area for its schools and amenities, like nearby Jells Park.

“Cristine was mortified when we bought it, she couldn’t see the diamond in the rough, but the orientation was excellent as is the location,” Mr Castricum said.

“Now nearly every home in our street has been removed, replaced or renovated significantly.”

The pair are selling their five-bedroom home after raising their three sons there, and having one of their granddaughters born inside the house two years ago.

10 Trafford Court, Wheelers Hill, comes with a pool and perfect location.

Indoor entertaining is also a snap, thanks to expansive open-plan living areas.

The $2.3m address comes with a pool, a home cinema and a sprawling open-plan living zone that epitomises the type of living most families in the suburb enjoy.

Ray White Ferntree Gully’s Cristine Jones is handling inquiries.

---

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.

MORE: Victoria’s most clicked on bargain real estate listings in 2023

Elizabeth Island: Western Port Bay paradise isle snapped up in less than five weeks

Former Price is Right model Elise May selling Camperdown retreat