PropTrack: Where Melbourne home prices could soar and plunge by 2029
A five-year property boom could add six-figures to the price of a typical home across more than 70 per cent of Melbourne. See what could happen in your suburb.
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A five-year property boom could add six-figures to the price of a typical home across more than 70 per cent of Melbourne.
New housing market analysis shows lucky homeowners in 21 suburbs around the city could see values rise a whopping $500,000, and three could gain an eye-watering $1m by 2029.
They’re among an incredible 263 suburbs anticipated to make more than $100,000, about 72 per cent of those assessed.
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PropTrack insights show the median house price in Victoria, as of April 2024 was $775,000, but if the past five years of growth is anything to go by that price could jump to $992,769 before the end of the decade.
The exclusive data from the housing analysis team uses the growth in every suburb around Victoria’s median home price, across both houses and units, from the past five years to extrapolate what it could be in 2029.
It pegs the Mornington Peninsula, as well as Melbourne’s southeast and inner east for growth of up to 65 per cent.
In Melbourne’s inner ring, the suburbs to watch are Deepdene where the current $2.76m median home value could grow 47 per cent to $4.065m. It’s followed by Balwyn North, which could go from $2.24m to $3.208m and Alphington, which is facing a $1.578m typical home price if a 39 per cent lift occurs.
Jellis Craig Boroondara auctioneer Patrick Dennis said he thought the data pertaining to Deepdene and Balwyn North were underpinned by good schools in the area.
“Buyers are leaving nothing to chance, especially with turnkey products; the Covid pandemic taught us what appetite buyers have,” Mr Dennis said.
“If they know a property is ready to go, they will head to auction; they will leave nothing to chance.”
For Melbourne’s outer suburbs, Croydon Hills has the most to gain if housing history repeats itself, set to grow from $1.28m to $1.79m. Pearcedale could jump from $1.003m to $1.416m, while Narre Warren North’s $1.7m typical home price could be $2.334m.
There could be even bigger gains on the Mornington Peninsula, with suburbs like Blairgowrie, Rye, Somers, Mount Martha and Sorrento all in the top five suburbs Melbourne-wide, after they all grew at least 55 per cent in the past five years.
Sotheby’s International Realty managing director Rob Curtain said while possible there were several headwinds the market would have to overcome for a repeat performance.
“Buyers looking at homes on the Peninsula worried about higher interest rates, cost of living pressures, land taxes and vacancy taxes,” Mr Curtain said.
He added that holiday homes had become an “expensive asset” for families to own particularly if they were only used 30 or 40 nights in a year.
PropTrack senior economist Paul Ryan said the data showed a “huge lift” in property values.
“We’ve looked at current median prices across all suburbs and then extrapolated forward what prices would look like if we saw the same experience over the past five years,” Mr Ryan said.
“These are not forecasts, but it’s a good thought exercise in understanding why what we’ve seen over the past five years was so exceptional.”
The economist said most of the suburbs with significant price growth were either in affordable areas or possessed a lifestyle factor.
“If you look across the suburbs that have done the best (over the past five years), they really hit those changes in preferences we’ve seen since the pandemic — one, towards lifestyle areas, and two, bigger blocks and houses,” he added.
However, Mr Ryan said it was unlikely the same pace of price growth would continue over the next five years.
“Although prices have been growing this year, we’ve seen a slowdown in price growth to a more predictable level, unlike what we saw in 2021 and 2022,” he said.
“We’ll still see prices increasing over the next 12 months to two years because of the demand versus supply story and expectations that interest rates will fall maybe early to mid next year.
“Rates are still relatively high, though, so we’re likely to see slightly below average growth over the next few years.”
And that could be a good thing for those struggling to buy.
“If these figures came to pass it would represent a deterioration of affordability conditions for first home buyers,” Mr Ryan warned.
Median prices in some of Melbourne’s prestige suburbs were predicted to fall by 2029,
The forecast by PropTrack showed Elsternwick’s $775,000 median home price is projected to drop 39 per cent by 2029 to $470,000, losing $305,000 in value.
Similarly, East Melbourne and Hawthorn East are forecast to slip from $745,000 and $742,000 to $470,000 and $495,000 respectively.
In regional Victoria, the data showed Warracknabeal in the state’s north west might expect the most growth from $240,000 to $540,000. Followed by Orbost, in East Gippsland which could grow from $347,000 to $750,000.
Euroa, in the Hume Shire, could become a million dollar town from $533,000 to $1.091m by 2029.
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Originally published as PropTrack: Where Melbourne home prices could soar and plunge by 2029