Median property prices in Melbourne and regional Victoria edged higher in the December quarter although buying activity remained relatively subdued on the back of lacklustre economic conditions, the Real Estate Institute of Victoria (REIV) has reported.
“REIV data confirmed that, overall, the median house price has not changed over the last six months; the key factors driving the current market are a combination of lower consumer confidence, a slowing state economy and an increase in supply,” said REIV CEO Enzo Raimondo.
The REIV said feedback from members during the December quarter revealed that both buyers and sellers were sitting on the sidelines, waiting for an improvement in conditions.
In the December quarter, the REIV reported that house prices in metropolitan Melbourne rose to $550,000, up 1.9 per cent from a revised September quarter median of $540,000. The median price of units and apartments also increased, up by 1.1 per cent to $455,000.
Mr Raimondo said that demand in the local residential market improved marginally from the previous quarter, as did housing affordability, due to the two interest rate cuts; however, transaction numbers were significantly lower than for the same time the previous year.
“As we head into 2012, there is no doubt that housing affordability has improved with the combination of lower house prices and two interest rate reductions.
“The strongest growth in demand was found in Kew, Prahran, Kensington, Mornington, Port Melbourne, Balwyn North, Blackburn, Wantirna South, West Footscray and Mount Waverley; however, most of these suburbs recovered ground lost in the September quarter.
“In contrast to the last few quarters, there was very little difference in the performance of the auction and private sale markets. Houses sold at auction recorded a median of $700,000, an increase of 1.4 per cent, while those sold at private sale recorded a 0.7 per cent increase to $478,444.
For apartments and units, the strongest demand was recorded in North Melbourne, Armadale and West Footscray.
Regional Victoria also saw modest gains late in the year, with the median house price rising by 0.8 per cent to $312,500.
“Of the three main regional centres, demand was highest in Bendigo, where the median house price increased by 6.3 per cent to $294,000,” Mr Raimondo said.
“In Ballarat the increase was 3.6 per cent to $290,000 and in Geelong there was a drop of 2.3 per cent to $380,000.
“The REIV does not predict any significant change in the market during the March quarter as it is generally the quarter with the least activity, however we are starting to see signs that the market may have bottomed in 2011and, if there are improvements in economic conditions, we may see an improvement in transaction activity from the second quarter of this year,” Mr Raimondo concluded.