Melbourne home values rise driving nation’s overall property market: CoreLogic
Melbourne homeowners enjoyed the largest median value boost in more than two years in August as the market blooms into spring.
CoreLogic’s latest Hedonic Home Value Index shows Melbourne’s median dwelling value increased 1.4 per cent to $626,703 last month, marking the third straight with a rise.
That’s the city’s biggest monthly increase since mid-2017 — before the market’s most recent peak that November — as the national figure also rose for the first time since October 2017.
Melbourne houses were up 1.3 per cent to $716,542 and units up 1.5 per cent to $540,056 last month, the latest figures show.
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The national dwelling value median was up 0.8 per cent to $521,157, and the combined capital cities 1 per cent to $597,072, in August.
CoreLogic research director Tim Lawless said the “significant lift in values” aligned with a consistent increase in clearance rates and a deeper pool of buyers amid low stock levels.
“It’s likely that buyer demand and confidence is responding to the positive effect of a stable federal government, as well as lower interest rates, tax cuts and a subtle easing in credit policy,” he said.
“While the ‘recovery trend’ is still early, it does appear that growth trends are gathering some pace, particularly in the largest capital cities.”
It was the third straight month of rises in Melbourne, Sydney and Hobart, and second in Brisbane — but there’s still a way to go.
Melbourne dwelling values are still down 9.5 per cent from their peak and it was expected to take “some time for values to return to their previous highs”.
Every Melbourne subregion has had a lift in values over the three months ending August, though, as the overall figure across the city lifted 1.8 per cent during that time.
Areas close to the city centre recorded the largest value increases, but Mr Lawless noted “the rapid recovery across higher valued properties makes sense considering this sector of the market recorded a more substantial correction”.
CoreLogic head of research Cameron Kusher said the Melbourne increase was a “step up from what we’ve seen in value growth and it’s a continuation of the past two months“.
“I think it obviously shows the interest rate cuts and other changes we’ve seen have stimulated the market, but when you break it down you can see that it’s still being largely driven by Sydney and Melbourne,” he said.
Values in Victoria’s capital increased 0.2 per cent in both June and July to hit a $619,443 median. There was 18 straight months of decline in the city before that.
It comes as Melbourne’s clearance rates reached heights not seen in two years. The week of August 24’s 77 per cent success rate from 662 auctions was dramatically higher than the 56.5 per cent figure recorded a year ago.
It marked the auction sale rate holding above 70 per cent for six of the past seven weeks.
Melbourne’s inner suburbs, inner east, outer east and southeast notched impressive final clearance rates above 80 per cent that week, CoreLogic shows.
Wakelin Property Advisory director Jarrod McCabe said some parts of the city would recover faster than others.
“There are some inner suburbs that are probably in positive growth territory for 2019 already, while other locales are still falling,” Mr McCabe said.
“We believe that confidence and momentum will build over the remaining months of 2019, and with supply still comparatively constrained, buyer pressure will increase prices 2.5 per cent by the end of the year.”
Vendor Samone Bos said she felt “more optimistic” about selling her three-bedroom Parkdale home than she would have a few months ago.
“It seems like (the market’s) getting a lot more buoyant,” she said.
“I’m hoping the right buyer will come along.”
The children’s book author has $950,000-$1.03 million price hopes for the refurbished mid-century home at 1 Ilma Court, which is due to be auctioned on September 14.
— with Scott Carbines
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