REIV Quarterly Medians: Melbourne million dollar house club growing again as prices rise

Melbourne suburbs are climbing back into the million-dollar club, with nine regaining enough lost value in the past three months to rejoin the millionaire list. See what prices are doing in your area.

Homes like 112 Sandhurst Blvd, Sandhurst, have helped propel the suburb back into Melbourne’s million-dollar club.

Melbourne suburbs are climbing back into the city’s million-dollar club as signs continue to emerge the city’s property market is getting back into gear.

Interest rate hikes have slashed buyers’ borrowing capacity since May 2022 and put downward pressure on home prices, dragging the city’s median house price and some suburbs below the seven-figure mark.

But in the past three months Real Estate Institute of Victoria data shows nine regained millionaire status including Mulgrave, Patterson Lakes, Sandhurst and Knoxfield.

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The once affordable Heidelberg Heights and Diamond Creek have also ridden a wave of growing homebuyer confidence back up the property ladder, as have Briar Hill, Keilor East and Gembrook.

There are now 169 suburbs in the city’s million-dollar club, equal to the number at the end of 2022 but well below the 191 that made the list a year ago.

REIV chief executive Quentin Kilian said buyers looking for homes worth more than $1m were typically less susceptible to interest rate hikes as they were often buying a second home with equity behind them, and more activity from them reflected growing confidence.

Buyers will need to splash $1.15m-$1.25m to get their hands on 11 Ellis Park Ave, Mulgrave.

Mr Kilian added that while the city’s overall median house price was down compared to last year the declines “fly in the face” of the 30 per cent drops predicted by some economists as rate hikes commenced last year.

“If you look at the evidence of the last 12 months that hasn’t happened,” Mr Kilian said.

“And there’s a very good chance we could see some rate decreases next year when the RBA feels like they have inflation under control.”

Last week Michelle Bullock was announced as the Reserve Bank of Australia governor, set to Philip Lowe who has raised interest rates 13 times since May.

While the hikes have hit some home markets, and there are predictions of more to come, OBrien Real Estate director Stavros Ambatzidis said they were unlikely to impact Patterson Lakes and Sandhurst.

“Rates don’t really affect buyers at the $1m price point,” Mr Ambatzidis said. “And the surrounding suburbs, Carrum and Seaford, are starting to jump too.”

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SUBURBS BACK IN MILLION-DOLLAR CLUB

Mulgrave — $1.135m (up $165,000)

Patterson Lakes — $1.116m (up $251,000)

Sandhurst — $1,100,050 (up $134,550)

Knoxfield — $1,080,500 (up $218,000)

Heidelberg Heights — $1,032,500 (up $127,500)

Some values in once affordable areas are much higher than $1m, like the $1.8m-$1.95m asking price for 4-6 Altona St, Heidelberg Heights.

Diamond Creek — $1.03m (up $40,000)

Briar Hill — $1.015m (up $125,000)

Keilor East — $1.005m (up $25,000)

Gembrook — $1m (up $50,000)

*Growth recorded across June quarter

Source: REIV June Quarterly Medians

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Located on either side of the end of EastLink, the recently returned million-dollar suburbs have benefited from buyers seeking access to beaches and golf courses, but also because of easy access to freeways as city traffic surges post Covid.

Mr Ambatzidis said the pair had most likely only dropped out of the $1m club due to a shift in demand, as buyers sought markets closer to the city in recent months.

The REIV figures show Melbourne’s $960,000 median house price declined $150,000 (13.5 per cent) in the past year, while the typical unit is $55,000 (8.1 per cent) cheaper in the same period at $626,000.

Gembrook might have only just squeezed back into the million-dollar club, but with a $1.33m-$1.39m asking price 18 Beenak East Rd, Gembrook, could help raise the bar.

However, figures appear to have improved in the most recent quarter, with house prices declining just $10,500 (1.1 per cent) since the end of March and units having climbed $19,500 (3.2 per cent).

Separate figures from PropTrack recently showed more than 80 per cent of Victorian suburbs gained value in the past three months.

The REIV medians showed Kew was Melbourne’s top-performing suburb of the past year, where there were at least 30 sales to ensure robust median price data.

The leafy eastern suburb is up $227,500 (12.9 per cent).

75 Steele Creek Drive, Keilor East, gives an idea of what you get for $1.525m in the suburb.

But it only just edged out Harkness, where the median house climbed 6.3 per cent from $550,000-$584,500. In the west, Sunbury was the best in show having jumped $35,000 (5.3 per cent) to $695,000.

Malvern in the south east was home to the biggest annual drop in value, with the median having fallen from $3.32m to $2.75m (17.2 per cent).

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