Melbourne home values rise as regional prices fall: PropTrack Home Price Index
Melbourne unit values have risen to become more expensive than regional houses as country property prices fall. And there are signs it’s changing first-home buyer activity.
A rise in Melbourne home prices and a fall in regional areas in March has made it more affordable to buy a house in regional Victoria than a unit in the big smoke.
And there are signs first-home buyers are eyeing country towns and cities as a two-speed property market raised the cost of a typical unit in the state’s capital above the $600,000 limit at which they don’t have to pay stamp duty.
PropTrack’s latest Home Price Index shows the city’s median unit price climbed almost $18,000 (3 per cent) in the past year to $612,000.
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Those entering the market for the first time do not pay stamp duty for purchases up to $600,000, and will now have to pay at least some of the tax if they want to buy a typical Melbourne unit.
House prices grew a more modest amount, rising about $13,500 (1.5 per cent) to $915,000 in the past 12 months — though are still about $30,000 (3.57 per cent) below their peak set early in 2022.
PropTrack economist Eleanor Creagh said values for both houses and units in Melbourne rose marginally in March, but lagged the rest of the nation and were not expected to reach record levels again until 2026.
Meanwhile the $605,000 median house price for the rest of Victoria is down more than $7500 (1.23 per cent) in the past year and the typical unit in regional cities and towns has lost just over $2000 in value as it dropped 0.5 per cent to $424,000.
Ms Creagh said both value fell for both in March and were now at their lowest level since 2021 after losing ground in eight of the past 12 months, though still above pre-pandemic levels.
Separate figures from the State Revenue Office (SRO) show the number of first-home buyers receiving stamp duty concessions in Melbourne is falling, with fewer than 25,000 claiming it in the 2022-2023 financial year — the lowest number in seven years.
Meanwhile, the number in regional Victoria rose by almost 1000 to 11,540 in the same timeline and is at the second highest level on record for non-metropolitan areas.
Ms Creagh said the SRO data was a likely sign market entrants were considering regional areas with a “relative affordability advantage” as a way to beat a mix of factors including rising home prices in Melbourne and reduced borrowing capacity.
“That seems to make sense, and unit values are significantly cheaper in regional Victoria — even in Geelong it’s just under $550,000 for a median unit and that is by far the most expensive regional unit market,” she said.
Property Home Base founder and buyer’s advocate Julie DeBondt-Barker said her firm was working with significant numbers of first-home buyers in Melbourne, many of whom were now struggling to make their move.
While she was not aware of any resetting their sights on regional areas, Ms DeBondt-Barker said many were facing long waits to find a home due to a lack of affordable options, particularly in the city’s northern corridor from Thornbury to Bundoora.
“But for those open to finding the right house in a broader geographic location it is much easier,” she said.
Despite Melbourne home value rises, Victoria is lagging behind the rest of Australia.
The aggregate home value across the nation’s capitals rose close to $3500 (0.4 per cent) in March to $832,000 — and is up a whopping $59,000 (7.64 per cent) across the past year.
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Originally published as Melbourne home values rise as regional prices fall: PropTrack Home Price Index