Melbourne’s property market performed strongly over 2017. Median house prices grew 1.3 per cent to $880,902 over the September quarter, meanwhile, house prices rose $107,503 higher than the previous year, representing a 13.9 per cent rise. However, many vendors are wondering whether specific areas have better auction results.
Areas like the eastern suburbs experienced strong growth and high demand throughout 2017. Asking prices went up by 27 per cent in the inner east from June 2016 to June 2017, while prices in the middle and outer rings went up by 14 per cent and 8 per cent respectively. But vendors looking for suburbs with greater auction success should look at clearance rates as well as growth and demand to get more insight into buyer sentiment and current conditions.
Clearance Rates Varied Across Melbourne
All regions of Melbourne saw a boost in the number of houses sold at auction throughout the year, except for the inner south. According to CoreLogic data, clearance rates were at their highest in the north east and outer east, sitting at 74 per cent.
Suburbs across the east have been performing well as shown below:
|Suburb||Clearance Rate (Sept Q)||Total Auctions (Sept Q)|
|Box Hill North||66.7%||59|
|Box Hill South||72.7%||45|
Focus on Local Market Behaviour
Melbourne experienced the second highest annual growth rate of the major cities during the September quarter, falling just behind Hobart. Strong prices have been creating confidence among vendors but it’s important to remember that regions within Melbourne perform in varying degrees.
Clearance rates and median auction prices varied across Melbourne and as you can see, these two figures don’t always correspond:
|Region||Clearance Rate||Median Auction Price|
|Outer East||74%||$1.02 million|
|Inner South||71%||$1.4 million|
|Inner Urban Melbourne||70%||$1.4 million|
The varied results means it’s essential to understand local market behaviours before making any decisions based on wider performance. For example, key factors driving demand in the eastern suburbs include migrants looking for affordable property in the mid to outer east and families who want to live in the private school belt in the inner east.
Understand your demographics and keep an eye on economic, job and population growth at the local level, which we believe has the greatest influence on housing price trends and growth.