Melbourne prices rise for the first time in months: PropTrack

Melbourne’s property market has rallied through October, rising for the first term after a prolonged downturn, while the pace of price gains reignited across most capital cities.

McGrath Geelong auctioneer David McGuiness and listing agent Egle Skridulis conduct an auction in Victoria, where Melbourne prices have risen for the first time in six months

Melbourne’s property market has rallied through October, rising for the first term after a prolonged downturn, while the pace of price gains reignited across most capital cities.

It was the first time in six months that housing researcher PropTrack’s monthly Home Price Index recorded a price rise in the Victorian capital, up 0.49 per cent through October.

The lift was larger than any other major city and pulled ahead of the national monthly growth rate of 0.26 per cent.

While Melbourne was once the second most expensive property market in the country, it slipped into fourth place this year after failing to register the pandemic growth experienced by the other mainland state capitals. But now the city’s relative affordability may be it’s strongest asset, according to PropTrack senior economist Eleanor Creagh.

“One month doesn’t make a trend, so I guess the jury’s still out on that front,” she said.

“But certainly, it may be possible that, given Melbourne is historically cheap relative to other markets and … property is the cheapest its been at any point over the past two decades, it could be the case that we are approaching a turning point.”

Elsewhere, the spring selling season also led to price growth reigniting and picking up pace in Sydney (up 0.19 per cent), Perth (up 0.32 per cent), and the ACT (0.29 per cent) through October. Hobart prices held firm, while Adelaide and Brisbane gained 0.43 per cent and 0.19 per cent respectively.

“Though home price growth regained speed in October, elevated interest rates and affordability constraints are weighing,” Ms Creagh said.

“Buyers now have more properties to choose from, and uncertainty around the timing of interest rate cuts remains. Still, prices are expected to remain on the rise as the busier selling season closes out.”

Prices are tipped to keep rising despite some inconsistency in auction clearance rates, with homes sold under the hammer considered an immediate sign of market strength. However, Ms Creagh said the promise of a looming rate cut may inspire some buyers to buy sooner rather than later to avoid the possible market bounce experienced when rates were slashed through the pandemic.

“There is an underlying consensus that interest rates are going to move next year, and historically, it has been seen as a good time to buy beforehand.”