What could cause Melbourne home prices to surge up to $150k |PropTrack Home Price Index

PropTrack’s Home Price Index shows Melbourne has had the second slowest property price growth in a year of all the capital cities. But values could surge if a few key variables changed.

17 Cleary Court, Clayton South, is listed for $800,000-$880,000.

Property experts have revealed what needs to happen for Melbourne home prices to go from rising $7000 a year to surging in the $100,000s in 12 months.

It comes as the city’s home prices have grown at the second slowest rate of all the nation’s capital cities in the past year, sitting just behind Hobart.

PropTrack’s latest Home Price Index revealed the Melbourne’s $806,000 median home price rose just $7000 (0.87 per cent) in the 12 months to May.

RELATED: Melbourne home prices languish while other capital cities climb

Suburbs that Victorians never want to leave revealed

Regions where a Melbourne home ‘pays for itself’

But with typical home values in cities like Perth surging as much as $150,000, there’s scope Melbourne’s housing market could also jump if a few key variables change.

Regional Victoria’s property market also remained flat, with the typical property value increasing by about $6600 in the past year to $588,000.

But if interest rates began to move downwards, some real estate gurus believe this could be enough to “stir up” the Victorian market.

2/27 Nicholson St, Bentleigh, is listed for $800,000-$850,000.

Melbourne’s median home price is within this two-bedroom townhouse's price hopes.

PropTrack senior economist Eleanor Creagh said if home prices continued to lag, Melbourne’s relative affordability compared to other capital cities could start to be capitalised on.

Though it could be “some time” before that came to a head.

Ms Creagh added that more substantial property price rises would also depend on if a shift in interstate migration patterns during Covid continued long term.

The economist said the “Millennial exodus” of Sydney-siders that historically would have moved to Melbourne, were currently choosing to move north instead.

“That pandemic-induced disruption to net-migration trends has somewhat continued post- pandemic and is probably one of the factors as to why Brisbane is continuing to outperform Melbourne,” she said.

13 Parker St, Footscray, is listed for sale.

The two-bedroom house has $800,000-$880,000 price hopes.

Victorian home prices could also continue to be hampered by higher property taxes than the rest of the nation.

Buyer’s agent Kim Easterbrook said the state wasn’t necessarily the “flavour of the month” for property investors because of the more stringent rental compliance measures than other parts of Australia, but said she believed that negative sentiment would lift.

“If we get one or two interest rate decreases, I really think that’ll start stirring up the market. 12 months time will be interesting,” Ms Easterbrook said.

She believed the state’s flat home prices in the past year was a good thing as it showed the market was stable.

“There’s been a lot of uncertainty over the last 12 months, and the fact that it actually remained the same, I think just shows that the market is actually quite resilient,” she said.

“If the property is priced right, it will sell. I think buyers, generally speaking, are wanting a lot more boxes ticked before committing.”

---

Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.

MORE: International buyers fly in to see $75m+ Melb mansion

Melbourne Australia’s capital of mortgage misery

Where to find Melb suburbs with rents under $500

[e-mail]

Originally published as What could cause Melbourne home prices to surge up to $150k |PropTrack Home Price Index