Sought-after Melbourne suburbs where house prices rose by double digits in 2023!

by | Jan 29, 2024 | property

Dear Fellow Property Investors,

A handful of Melbourne suburbs recorded double-digit property price increases over 2023, bucking the city’s wider trend of modest growth.

Melbourne’s median house price median rose 2 per cent to $1,047,000 over the 12 months to December, and its unit price grew 4 per cent to almost $580,000 in the same period, the latest Domain House Price Report showed.

In the ever-popular inner north suburb of Fitzroy, however, house prices increased 16.4 per cent to a median $1.63 million last year. Unit prices in neighbouring Fitzroy North also shot up over the year, up 12.5 per cent to nearly $617,000.

Burwood (up 11.9 per cent to $1,411,000) and Maribyrnong (up 11.9 per cent to $1,031,000) had the next highest house price growth, and Notting Hill (10.8 per cent to $385,000) and Bayswater (10.5 per cent to almost $608,000) were the closest for units.

Domain chief of research and economics Dr Nicola Powell said the growth was out of character for Melbourne. “There are a handful of suburbs that have seen double-digit increases and declines, but the bulk of suburbs haven’t seen a lot of movement in the past 12 months,” she said.

Powell said Fitzroy and Fitzroy North had over-performed particularly when compared against blue-chip suburbs which typically lead market movements.

Nelson Alexander agent Jonathan West said sought-after suburbs tended to help boost prices of their neighbours, particularly if they held high-quality homes. Brunswick East, for example, recorded house price growth of 4.3 per cent over 2023 to a median of $1,249,000.

“It’s the connection suburb to Fitzroy North and Carlton North,” West said. “They will start coming out of Carlton North and Fitzroy North and look in Brunswick East to see what’s around, then they’ll hop to Brunswick and Brunswick West if there’s nothing there.”

Brunswick West had less spillover effect, however. House prices there fell 19.8 per cent to $923,000 over the year.

West said the Brunswick West neighbourhood included homes which needed more work, and didn’t attract the same premiums as turnkey properties.

“Brunswick East is more expensive, there’s no doubt about it. With Brunswick West, you get bigger blocks and wider streets,” he said. [The median price] is based on those older style double-fronts that need a lot of work.”

Prices fell the furthest in the unit markets of Clayton South (down 23.2 per cent to $460,000) and St Kilda West (down 20.7 per cent to $486,000), and for houses the biggest drops were in Elwood (down 19.8 per cent to $2,085,000), Brunswick West and Alphington (19.4 per cent to $1.55 million).

Westpac senior economist Jarek Kowcza said the demand for renovated homes was a common trend because of Australia’s high inflation, particularly in the construction sector.

“Properties that are ready for people to move into are really popular,” he said. “The cost of building a new home has been one of the main contributors to inflation.

“So that’s meant the cost of renovating the home has really increased. The availability of staff and materials are also a factor.”

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Do you have a game plan for 2024?

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Or, will you join them?    

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