The REIV December quarter medians confirm strengthening demand and an increase in housing prices in Melbourne.
The median house price in Melbourne increased by 7.8 per cent to $555,000 from $515,000 (revised) in the September quarter. The median price for units and apartments increased by 4.2 per cent to $456,000 from $437,500 (revised).
Buyer confidence a key factor
Strengthening demand has resulted from a combination of improved Victorian consumer confidence, four interest rate cuts and the seasonal increase in activity in the December quarter.
Overall transaction numbers remain low in historical terms and that may cause some ongoing fluctuations, but if improvements in confidence continue 2013 will see improved activity and an increase in sale values.
Some of the higher increases in demand were recorded the more expensive suburbs where buyers have found significant value: Kew, Brighton East, Essendon, Hawthorn, Glen Iris and Fitzroy North. These suburbs recorded very strong clearance rates as buyers competed for well priced property.
Mixed results across the state
The stronger growth in the upper end of the market is a reflection of the larger falls in prices recorded in 2011. Healthy growth was also recorded in the more affordable market segments with the median increasing by 4.5 per cent in middle suburbs and 3.6 per cent in the outer suburbs.
Abbotsford has become the first suburb with a million dollar median unit price as a result of 20 sales valued over $1m in one current development. This will likely drop below a million in later quarters.
Overall house prices in regional Victoria remained stable with a median of $305,000. However key centres continued their steady performance with the median in Geelong increasing by 8.1 per cent to $395,000: by 4.7 per cent to $310,000 in Bendigo and by 1.8 per cent in Ballarat to $290,000.