Melbourne homebuyers had an extraordinary 1000-plus days to purchase a property from when they bottomed out, to when they recovered.
Melbourne has notched a record median house price for a second straight month, cementing its status as a $1m city — and the end of one of the longest buyers’ markets in its history.
PropTrack stats show the Victorian capital took an extraordinary 1000-plus days to recover from a price plunge led by rising interest rates in 2022.
Their latest Home Price Index data, released today, shows the Victorian capital has cemented its status as $1m city, with a $1.007m median house price in October — the second straight month above the milestone.
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But while it took less than a year for property prices to hit bottom as interest rate hikes hammered the housing market in 2022, the more than $67,000 (7.2 per cent) recovery has taken more than 1060 days to this point — and around 1030 days to when it returned to a peak during September.
A hefty $50,700 of that gain has occurred in the past 12 months as interest rate cuts have helped rekindle confidence in the city’s housing market, and helped Melbourne achieve one of the fastest price accelerations in the country, according to PropTrack senior economist Eleanor Creagh.
Unit values are also back in the black, up about $23,500 (3.9 per cent) from where they bottomed out and now worth a median $625,000.
PropTrack senior economist Eleanor Creagh believes home prices will now keep growing — even without another rate cut in November. Picture: John Gass.
Melbourne home values spent years treading water between peaks. Picture: Sarah Matray.
Ms Creagh said after reclaiming its peak Melbourne appeared on track to continue gains into the new year.
The economist added that expectations the Reserve Bank would not announce another cut on Tuesday this week, following a rise in inflation figures revealed last week, wouldn’t stop prices rising.
“But it’s potentially a slightly slower, and narrower upswing if rates remain on hold,” Ms Creagh said.
“It will trim the edge off confidence and buyer sentiment, but I’d still say we will see prices rising.”
She said that while there was strong growth in the upper end of Melbourne’s housing market, the federal government’s October boost to the First Home Guarantee by removing caps on places and incomes meant more affordable brackets would likely also experience gains — despite “conservative modelling” from Treasury on its impact.
Real Estate Buyer’s Agents of Australia Victorian representative Matt Scafidi said the buyer’s market that had existed from 2022 to as little as a few months ago had been one of the most extended in Melbourne’s history.
Buyer’s advocate Matthew Scafidi says one of the most protracted buyers’ markets in Melbourne’s history is now definitively over.
Melbourne’s overall home price is now up about $67,000 from when it bottomed out in December, 2022. Picture: Jason Edwards.
“The past two years have been the best time to buy a home for decades, but we are now at the end of that — with two months in a row at over $1m for the city’s median, it’s now back to where it was,” Mr Scafidi said.
“But I can’t remember it dragging on with a flat market for such a long time.
“Not in 2018 or even back to the global financial crisis (2008). It usually bounces back really quickly.”
The buyer’s advocate said while interest rate hikes had started the downturn, the flat market had been extended by state government decisions to increase land tax on secondary properties — which had led to large numbers of investors flooding the market with B and C-grade homes for sale.
Victoria’s top performing area for the past year was the state’s north west, including areas like Mildura, where the median price rose 8.25 per cent to $396,000 in the past year.
Melbourne’s best results were recorded in the city’s north west, from Tullamarine through Sunbury and out to Macedon and Lancefield, with the wider region’s median dwelling price now at $758,000 after a 6.08 per cent uptick.
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