Melbourne home values notch highest monthly gains since 2009

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Jellis Craig Richmond auctioneer Elliot Gill in action in Melbourne’s inner east, which leads Australia’s capital city subregions for property price growth over the past year. Picture: Josie Hayden

Melbourne home values have notched their largest monthly gain in a decade, as the city continues to post a “rapid” market recovery that’s shocking industry figures.

Budding buyers are being urged not to sit on their hands, with price rises tipped to continue into next year.

Melbourne’s 2.3 per cent increase in house and unit values in October was “the largest month-on-month gain since November 2009”, according to property data firm CoreLogic.

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Values have now risen in the city for five straight months. Before that, they fell for 18 in a row.

Melbourne left Australia’s other capitals in its dust last month, with Sydney the next best performer with a 1.7 per cent rise. Perth was the only capital to record a decline, 0.4 per cent.

Victoria’s capital also notched the nation’s highest quarterly growth of 5.5 per cent to a $650,197 median.

Prices are still 1 per cent lower than they were a year ago, but the city is expected to post a positive annual result soon.

“This is shaping up to be a more rapid recovery than expected,” CoreLogic head of research Tim Lawless said.

“And I think it will continue.”

CoreLogic’s Tim Lawless is tipping continued growth.

CoreLogic’s Hedonic Home Values Index also named Melbourne’s inner east and inner regions as Australia’s two best capital city subregions for annual growth, up 3.1 per and 2.8 per cent respectively.

The Warrnambool and South West area was among the best regional performers, rising 4 per cent.

Stimulating the market were the lowest mortgage rates since the 1950s, the fact buyers had improved access to credit, and a supply-demand imbalance, Mr Lawless said.

“Fresh listings are at the lowest level we have on record, which goes back to 2007,” he said.

“It does seem homeowner confidence is still relatively low (while) buyer demand is rising.

“There’s an element of FOMO (fear of missing out) creeping back into the market.”

9 Gladhall Ave, Thornbury sold $132,000 above reserve for $1.178 million last month in a result the selling agent said “defies logic”.

National Property Buyers director Antony Bucello said investors were up and about, while strong population growth had pushed Melbourne ahead of Australia’s other markets.

“It’s recovered quicker than what most experts would have expected,” he said.

“There’s simply not enough supply.

“And now the dust has completely settled on (the banking) royal commission and federal election, and there have been interest rate cuts, buyer confidence is absolutely back.”

Mr Bucello said Melbourne homeowners may be buoyed enough by the strong sale prices and clearance rates to list in the new year, which would “balance the market out a bit”.

“But I wouldn’t wait (if I was buying),” he said.

“The market doesn’t look like it’s going to ease up.”

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