Melbourne home prices: 300+ suburbs lose value in the space of a year | PropTrack

Home prices are falling in hundreds of Melbourne suburbs, giving buyers their best shot at the spring market in years. See if your neighbourhood’s home prices are among those going backwards.

Nathan Mawby

@mrmawby

4 min read

October 12, 2024 - 5:00AM

Officer South has recorded Melbourne’s biggest reduction in median house prices.

Victorian homebuyers are set to cash in this spring, with median property values tens of thousands of dollars cheaper than they were a year ago in hundreds of suburbs.

PropTrack’s September quarterly values data shows house values are down in 311 suburbs around Melbourne across the past year, out of 406 assessed.

See how your suburb has gone over the past year here.

Melbourne’s median home price falls below Adelaide and Perth

Home-saving hacks could score Gen Z $500,000 in 10 years and save great Australian dream

Is now the time to invest in the market?

They also dropped in 219 of the 287 metropolitan suburbs covered in the analysis of unit values.

In regional Victoria there were 215 towns and suburbs with enough sales to generate median house value data, with only 53 of them notching a profit. And regional units posted gains in 15 areas, out of the 62 total.

Melbourne suburbs with multimillion-dollar typical house values were among those to record the biggest drops, with the more than $100,000 declines in median values for Elsternwick, now at $2.044m, Deepdene, $3.457m, and Caulfield, $2.228m.

But there have also been affordability improvements in less well-heeled neighbourhoods, with houses in Officer South falling 8.8 per cent ($74,224), the highest drop recorded by percentage, to $768,637.

Houses are also cheaper in Brooklyn, down 6.1 per cent to $776,660, and Albion, where the median value has fallen 5.8 per cent to $739,200.

PropTrack’s quarterly medians are calculated with an algorithm that contrasts home sale prices with variables including bedroom numbers and land size, to generate automated values for all homes in a suburb — not just those that have changed hands.

Affordability-conscious buyers are $27,477 better if buying a median-valued unit in West Footscray this spring compared to last. This is what $455,000 gets you today.

Prominent buyer’s advocate Cate Bakos said this spring was fantastic for those hoping to purchase, with significant numbers of homes to choose from including good quality offerings available — and most home sellers having to be “realistic”.

The professional homebuyer said there were more homes passing in at auction and selling within their advertised range, rather than above it, than she could remember in a very long time — but there were clear trends in what was selling well, and what wasn’t.

“Homes that are really beautifully renovated with no compromises and in a good spot, they can still expect competition,” Ms Bakos said.

“But something that is unrenovated with a bad floorplan, bad neighbours or on a busy road will really struggle. As will units with really high outgoings, for things like the owner’s corporation.”

PropTrack economist Anne Flaherty said while the cost-of-living and reduced borrowing capacity would also be influencing Melbourne’s housing market, Ms Flaherty said stronger results interstate suggested it was the volume of homes for sale giving buyers better odds.

In Heathmont, the median house value is down $55,000 compared to a year ago.

“We know that there have definitely been a lot of homes for sale on the market in Melbourne, and a lot of homes are being listed by investors that are just getting out of the market,” Ms Flaherty said.

The economist noted that the clearance rate for the city’s auction market was also dropping off, down to around the 60 per cent mark at the moment — and below the 65-70 per cent it started the year at, which is more in keeping with the historical average.

Many of the suburbs where median prices have fallen are in Melbourne’s south east, but local agents have warned buyers should be aware not all homes had lost value.

Gary Peer director Gary Peer said this year wasn’t “the spring we would have dreamed of” as the quality of homes for sale was down compared to 2023, and that was probably a big part of why median prices had dropped.

“The fact that quality stock is drifting away means that the types of property selling always would have been of lower value,” Mr Peer said.

Gary Peer said while the median price was down in some of Melbourne’s south eastern suburbs, it was likely due to a rise in lower quality home sales, with standout residences typically still selling well.

He said while the figures more likely showed a lack of quality stock, there were some homes that were struggling – predominantly newer units originally bought off the plan and being sold for the first time since they had been completed.

Investment properties were also less popular, with many being sold, and properties in need of structural work or that were basically just land value were not appealing to buyers.

“But otherwise, a lot of properties are selling for the same prices very similar homes were getting last year,” Mr Peer said.

“And good quality homes have always gone up. Even those that are a bit dated, but have good bones, people are now fighting to buy these homes again.

“These are still desirable areas, so there’s no reason to think the properties have become less desirable.”

Ms Bakos said poor buyer sentiment was a key reason why buyer numbers were down and there were more people selling than willing to purchase, and that might remain the case for some time yet.

“Until we have confidence that there’s a rate cut on the horizon, conditions will stay like this,” she said.

In Eaglemont the median unit price has fallen 5 per cent. This is what $795,000 gets you.

The buyer’s advocate said she recommended those with the budget to do so make a move on houses within 10km of the CBD as soon as they could, as these were most likely to rise quickly when the market turned a corner.

For those on tighter budgets, she said pursuing a house as close to the city as they could afford would also likely help them reap rewards — but to be aware they would likely face increasing competition the closer to town they got, especially for homes under $750,000.