Prices in Melbourne’s inner city have recorded massive rises since the start of the year, with one suburb up almost 16 per cent.
The median price for a home within 10 kilometres of the CBD reached a record $1.16 million in the March 2015 quarter, according to the Real Estate Institute of Victoria.
That is up 6.0 per cent on the December 2014 quarter.
REIV chief executive Enzo Raimondo said the strong price growth is the result of low interest rates and a desire to live close to transport and excellent infrastructure.
It is also being driven by a buoyant auction market, Mr Raimondo said.
Eight of Melbourne’s 10 most expensive suburbs are in the inner ring. At the top is Toorak, whose median price jumped 15.8 per cent over the quarter to $3.3 million.
Inner-Melbourne prices have jumped by 37.2 per cent since June 2012, when the median was $849,000.
The median price in the inner city has increased continuously since the September 2013 quarter.
Prices in the rest of Melbourne have also risen since the start of the year, although at reduced levels the further one gets from the centre of the city.
The median price for homes 10 to 20 kilometres from the CBD climbed 4.4 per cent to $791,000, while the median price for homes more than 20 kilometres from the CBD rose 0.2 per cent to $504,000.
Overall, the median house price throughout Melbourne is up 3.5 per cent to $665,000, while the median unit price rose 2.2 per cent to $520,000.