The dream of owning a home is getting more difficult in Melbourne, where the median house price has hit a record high of $826,000.
The city-wide median increased 7.6 per cent in the first three months of this year.
It is up $55,000 on December’s figure, reflecting the strongest quarterly growth since 2013.
The Real Estate Institute of Victoria (REIV) said four factors contributed to the record growth:
- strong buyer demand
- solid population growth
- low stock
- record low interest rates
“Melbourne’s property market is experiencing a perfect storm,” REIV president Joseph Walton said.
“To see a 7.6 per cent rise in a quarter where property transactions are generally low is quite surprising.
“We think one of the key growth drivers at the moment is strong buyer demand, which I guess is driven also by there being low supply to the market place.
“Given that’s expected to continue, price growth should continue to rise.”
Mr Walton said it was particularly surprising that the increase came in the March quarter, which was traditionally a quiet period compared to the September and December quarters.
While there were price increases in Melbourne’s outer, middle and inner suburbs, the growth was driven from the middle suburbs, where the median house price reached $960,000 — a 6.1 per cent jump.
Templestowe, in Melbourne’s north-east, had the largest growth. Its median house prices in the March quarter increased 17.6 per cent to more than $1.5 million.
“Given the dynamic of those four factors we think now is a particularly good time to sell,” Mr Walton said.
“But in saying that, we expect the growth trajectory to continue to move on an upward trend.”
Outer suburbs dominated the list of top growth areas, with increases of more than 14.5 per cent in Mount Eliza, Cranbourne North, and Mornington, in the south-east, and Kilsyth in the outer east.
Growth in prices in the apartment sector also continued to accelerate, with the median price up 3.8 per cent to $583,000.
The median house price in regional areas was up 4.1 per cent to $377,000.
The most affordable suburbs include Melton West, south-west of Sunbury, at $346,000 and Wyndham Vale, north-west of Werribee, at $390,000.
Is it a good time to buy and sell?
Mr Walton said it was a good time to sell because the drivers of the housing market were not expected to change any time soon and it was expected the “growth trajectory” would continue on an upward trend.
For sellers, Mr Walton said there was still plenty of value to be found in the market in suburbs like Wyndham Vale.
“Wyndham Vale is an area within outer Melbourne that we will see improvement and continued improvement with regard to infrastructure and amenity over time to meet its rising population growth,” he said.
“There are still affordable opportunities in the marketplace at the moment.
“Given our predictions with regard to continued price growth, we think it’s a market that’s important to participate in.”
Regional centres with good infrastructure such as Geelong and Bendigo will continue to perform strongly, Mr Walton said, with Geelong’s growth up 7 per cent over the past year.
“I see enormous value there, in particular in those satellite areas [of] Ballarat, Geelong, where they have strong CBDs, they’ve got their own reasonably strong local economy,” he said.