Where vacancy rates were previously increasing to national highs, new statistics have confirmed strengthening demand and median property prices increasing in Melbourne.
The Real Estate Institute of Victoria’s (REIV) December quarter results have seen the median house price increase by 7.8 per cent (to $555,000 from $515,000) from the previous quarter. The unit median price jumped by 4.2 per cent (to $456,000 from $437,500).
These changes suggest that Melbourne may, in fact, have bottomed out.
REIV CEO, Enzo Raimondo, said that improved consumer confidence in Victoria, the last four interest rate cuts and a seasonal increase in activity over December were the major factors for the upturn.
“Underpinning this increase has been an estimated 16 per cent increase in sales transactions in Melbourne compared to the December quarter in 2011.
“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,” Mr Raimondo said.
Some of the larger increases were actually seen in the expensive suburbs, including Kew, Brighton East, Essendon, Hawthorn, Glen Iris and Fitzroy North.
This upturn is one of a number of predictions for Victorian suburbs noted in Smart Property Investment’s Fast 50 report. Australian Property Monitors’ Andrew Wilson explained that the softening prestige market would attract interest that would help re-invigorate them over the year.
Mr Raimondo agreed, saying that “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.”
Fast 50 picks included Ashburton, Burwood and Surrey Hills.
“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,” said Mr Raimondo.
Speaking of Ashburton, Mr Wilson told Smart Property Investment that “Generally, the prestige market is seeing high demand from buyers looking for quality properties in prime locations.”
For Burwood, he said that change-up buyers may be behind the interest “as a result of softer prices over the last few years.”