The latest June quarter median price data released by the Real Estate Institute of Victoria (REIV) has shown that the Melbourne median house price has remained steady at $535,000. This is largely due to a combination of broader economic factors, slowing population growth as well as continuing low levels of consumer confidence. As a result, there has been no real capital growth recorded in the residential market so far this year.
A period of stability
Historical analysis shows that the real estate market moves in cycles and, after the initial price falls in 2011, the market is now in a period of stability marked by low activity. The overall median price has not changed in the past six months, indicating that the market has plateaued and is likely to remain like this until confidence improves.
The June quarter has revealed that the median price of a house in metropolitan Melbourne increased by 2.9 per cent to $535,000 from a revised March median of $520,000. Over the past five years the median has increased by 32 per cent from $405,000. However, it is interesting to note that the median house price fell back to this level following the GFC and, as a result, the market has risen by 32 per cent in the past three years.
The suburbs that produced the strongest results include Balwyn, Camberwell and Malvern East. In both cases, values are now almost at the peak recorded in 2010. Healthy demand was also recorded in Langwarrin, Cheltenham, Newport, Pakenham and Reservoir.
Top 10 Growth Suburbs (Houses)
Improved demand for metro units and apartments
The median price for a unit increased by 2.3 per cent to $450,000 from a revised March median of $440,000. Over the past five years the overall median increased by 29 per cent, and when compared to the housing market, we have seen fewer fluctuations in the median price for units/apartments.
Improved demand and a higher median were recorded in a diverse range of suburbs over the quarter. There was very strong growth in Carlton, which was in part due to a greater proportion of non-student accommodation being sold. Strong growth in prices was also recorded in Cheltenham, Pascoe Vale and South Yarra.
Top 10 Growth Suburbs (Units/Apartments)
Confidence is the missing element
The results confirm feedback from many professionals in the real estate industry, who have observed that both buyers and sellers are approaching the market in a conservative manner. This is translating into a lower number of sales than is present in a strong market and as a result, no real capital growth has been recorded.