Melbourne home price growth in slow lane, second last only to regional Northern Territory: PropTrack

2 weeks ago 12
Aerial view of houses in Armadale, looking towards the Melbourne city skyline

Melbourne’s property market has been stuck in the slow lane, with every other major capital recording faster home price growth since the Covid-19 pandemic hit.

Melbourne’s housing market has been stuck in the slow lane for the past four years, with every other major capital outpacing it.

Only properties in regional parts of the Northern Territory have recorded more sluggish growth than the Victorian capital since the Covid-19 pandemic hit.

The new figures from PropTrack show the city’s $802,000 typical dwelling value (a combination of house and unit values) is now $118,000 (17.2 per cent) above where it was in March 2020.

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Economist Eleanor Creagh said only the NT’s regional housing markets have grown more slowly, with a 9.4 per cent uplift.

By contrast, home prices nationwide are up almost 39.9 per cent.

Queensland and South Australia, as well as their state capitals, are all more than 60 per cent up. In Brisbane the increase translates to dwelling values rising by an eye-watering $310,000 to reach $801,000.

In all instances a “once in a generation” home price boom was recorded during the pandemic, followed by a modest correction.

While Victoria also benefited from the initial boom, it has been slower than other markets to respond to a recovery — largely due to higher numbers of homes for sale than in other states and territories.

Grand Prix

Despite just hosting the Grand Prix, Melbourne home price growth is stuck in the slow lane. Picture: Jason Edwards

“The supply of properties for sale, population growth, building activity, rental market conditions, interest rates, and interstate and regional migration have all influenced home price growth as well as how it has been distributed Australia-wide since March 2020,” Ms Creagh said.

“Since Covid, the housing market has cycled different phases. Home prices fell as interest rates quickly climbed. However, as net migration hit record levels, insufficient housing supply coupled with strong demand offset the higher interest rate environment and deterioration in affordability.”

While regional Victoria’s $584,000 typical home value has grown almost $170,000 (40.6 per cent) and outperformed Melbourne’s for the past four years, they are now slipping.

On Monday separate PropTrack data showed Victorian homes beyond the state capital had lost value in the last quarter and were at their lowest level since 2021.

This reflects the extreme growth experienced by many regional areas as lockdowns drove a Melbourne exodus in 2020 and 2021.

Homes in the Victorian capital have outperformed regional Victoria in the past 12 months.

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