Perth’s median home price could soon eclipse Melbourne | PropTrack Home Price Index

The Western Australian capital is hot on the heels of Melbourne, so much so that their median home price could overtake Victoria’s in a matter of months. SEE WHEN.

Sarah Petty

3 min read

December 2, 2024 - 12:01AM

6 Parkwood Ave, Narre Warren South is listed for sale.

Perth could eclipse Melbourne’s median home price as soon as May 2025 if both markets continue at their current pace.

PropTrack’s latest Home Price Index revealed Melbourne was the only capital city where home prices — inclusive of houses and units — fell in the last month and year.

Perth, Adelaide and Brisbane property values have skyrocketed in the 12 months to November by 12 per cent or more, while Melbourne’s prices have dropped by 1.63 per cent.

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As of November, Melbourne’s median home price is $792,000, while Perth, Adelaide and Brisbane’s are $778,000, $795,000 and $868,000, respectively.

If home values in Perth and Melbourne continue to increase by 0.23 per cent and decrease by 0.07 per cent each month, respectively, Perth’s median dwelling price could reach $788,798 as soon as May — notching above Melbourne’s predicted value of $788,679.

8 Service St, Coburg is listed for $750,000-$800,000.

The three-bedroom townhouse has a price range around Melbourne’s median property price.

However, PropTrack senior economist Eleanor Creagh said prospective property purchasers could soon find Melbourne a more attractive place to buy if prices remained flat.

“It could be that we are in the midst of that turning point,” she said.

“Given the underperformance that we’ve seen in Melbourne over the past four years, and the relative value that has emerged, there will come a point where buyers want to take advantage of that.”

She added that buyers in Melbourne have had more choice for homes compared to other capital city markets, and property tax hikes had also played a role in weak price momentum.

“Construction activity in Victoria has been more balanced relative to population growth over the past decade,” she said.

Mr Caine said continuous changes to the state’s property regulations and taxes was driving out investors.

Real Estate Institute of Victoria president Jacob Caine said the state had done the best job at introducing a large supply of new apartments and units compared to the rest of the nation, which contributed to its flatter price growth.

He added that continued change to property regulations and taxes within the state were proving unattractive to investors who were offloading their homes and exiting the market.

“New investors aren’t entering the market, whether that’s locally or from interstate markets, at the rates they have done historically,” Mr Caine said.

“They’re failing to see the return on investment being at a sufficient level, given those complexities around regulation and the additional impost of higher taxes.”

2 Avon Court, Langwarrin is listed for sale with $770,000-$847,000 price hopes.

The three-bedroom house has a price guide around Melbourne’s median home price.

However, buyer’s agent Emily Wallace said it was a good time to buy at the moment as she believed it was going to be become more competitive next year.

“Maybe upon reflection, people will wish that they had bought sooner,” Ms Wallace said.

She said many rentals across Melbourne were being offloaded by property investors which was pushing more tenants to buy, particularly for homes priced less than $750,000.

“I do think that space will remain competitive,” she said.

“If investors do see it as an opportunistic time to purchase in Melbourne, if they are potentially feeding into the idea that Melbourne is a bit flat, then that drums up competition.”