- For the first time, houses in metro Melbourne surpassed a median value of $1 million, jumping by 8.8 per cent from the previous quarter.
- Metropolitan Melbourne recorded the highest quarterly increase for houses since the December quarter of 2009
- In regional Victoria, houses surpassed $500,000 for the first time
- Despite the uplift in house prices, rent prices have declined, for the first time on record, Melbourne is the second most affordable capital city to rent a house, tied with Perth and behind Adelaide
- Unit rentals have plummeted by 12.8 per cent in the year to March
For the first time, houses in metro Melbourne surpassed a median value of $1 million, jumping by 8.8 per cent from the previous quarter.
Metropolitan Melbourne recorded the highest quarterly increase for houses since December quarter 2009 with the median now sitting at $1,004,500, according to data from Real Estate Institute of Victoria’s (REIV) quarterly March report.
With people spending more time at home than ever throughout last year, families took the opportunity coming out of lockdown to upgrade their home. This benefited house prices in middle Melbourne, the typical suburban family belt, which increased by 6.9 per cent from December to reach $1,148,500, according to REIV.
In regional Victoria, houses surpassed $500,000 for the first time and achieved a record quarterly median price of $510,500 with a 4.1 per cent increase from the December quarter, and 12.3 per cent annual growth. While regional unit prices recorded a 5.9 per cent quarterly increase, they are now 19.1 per cent more valuable than they were 12 months ago.
REIV noted that units in metro Melbourne achieved a median price of $672,500, 4.8 per cent higher than the December quarter and an annual increase of 3.4 per cent.
Following the lifting of intensive lockdowns in 2020, activity in the property sector returned in Victoria, with an estimated 35,000 transactions in the March quarter, the highest in a year’s first quarter since March 2015.
REIV President Leah Calnan said she expects the market will gradually begin to settle as life returns to normal following a tumultuous 2020.
“Market statistics show unprecedented levels of buyer interest across Victoria,” she said.
“Sellers and buyers didn’t waste any time getting active in the market. House prices have been boosted by incentives for First Home Buyers, mortgage repayment holidays, and low interest rates.”
“High demand across the state has also been fuelled by an increase in activity following Victoria’s lockdowns which saw thousands of auctions cancelled”, she concluded.
Despite the uplift in house prices, rent prices have declined, according to Domain’s March 2021 Rent Report.
The report noted that for the first time on record, Melbourne is the second most affordable capital city to rent a house, joint with Perth and behind Adelaide.
Unit affordability is not too far behind, going from the most expensive to the thirds most affordable.
Melbourne’s median house rent of $430 per week, down 2.3 per cent from a year ago, and is on track to be the cheapest across the country as the tightening rental markets in Perth and Adelaide see prices increasing.
Unit rentals have plummeted by 12.8 per cent in the year to March, and are now 2.6 per cent lower than three months earlier, according to Domain.
According to SQM Research, Melbourne’s vacancy rate slipped to 4.4 per cent in March from 4.5 per cent in February, the Melbourne CBD vacancy rate now stands at 8.3 per cent.