“Unprecedented” was one of the most commonly touted words of 2020, frequently used to describe the events being experienced due to the COVID-19 pandemic. Its use, however, has continued in earnest in 2021, but this time in relation to the increasingly robust activity being witnessed in the Australian property market.
2021’s Q1 results have delivered record outcomes in a number of categories, with no sign of things slowing down any time soon.
For the first time ever, the median price for a house in the Melbourne metro area has broken the million-dollar mark, sitting at an extraordinary $1,004,500. This is an increase of $81,500 on the figure recorded in the December 2020 quarter. This result is not only staggering, it is also the largest quarterly increase in median house price since December 2009. Regional houses have also reached a significant milestone, seeing their median surpass $500,000 for the first time in history. The median price is currently sitting at $510,500, which is a $20,000 increase on last quarter, and a 12.3% change year on year. Not to be outdone by regional houses, however, were regional units and apartments which saw a 5.9% increase in Q1 and an annual increase of 19.1% which is staggering. This result has no doubt been driven by the harsh Melbourne lockdowns of 2020, with many looking to escape the city for what they literally saw as greener pastures.
Melbourne’s auction clearance rate has also been strong across the past 3 months, but we are proud to say that our overall Noel Jones’ result has been even stronger! For Q1 2021, Melbourne recorded a clearance rate of 77.5% at auction; this compares to our Noel Jones clearance rate of 100% which has been achieved for the past 4 months.
It is also satisfying to see strong growth continue in many of our Noel Jones’ base suburbs, with Mitcham and Balwyn again leading the charge, with median house price upturns of 17.2% and 12.2% respectively; Wantirna also enjoyed double figure growth for the quarter. Ringwood enjoyed a favourable 12.5% swing year on year, making it the highest performing base suburb and the only one to record double digit growth. In the unit and apartment market, Box Hill blitzed the metropolitan zone with a quarterly increase of 53.6% whilst annually, Doncaster showed the most solid performance with a 22.6% change.
When Michael Hill of Noel Jones Wantirna was asked what he was seeing out in the field, he responded by saying “Buyer urgency is through the roof, being driven predominantly by those who have now missed out on multiple properties, either at auction or via private sale. Supply is just not keeping up with demand, and this is driving the consistent levels of growth we have seen since the later part of 2020, and into the first quarter of this year”. He stated that it’s not just new listings being snapped up either, but properties that have been overlooked for periods of time now strongly selling too. He also referred to an article in which CoreLogic research director Tim Lawless indicated that for every new listing at the moment, 1.1 properties are selling, meaning that supply figures are getting worse, not better.
This leads many who are closely observing the market to ask, ‘What’s next’? Will prices continue to increase, or will they soon hit their peak and then stabilise? Will the stock shortage correct itself, or will many who were thinking about listing their homes now hold off for fear that won’t find another property to purchase?’ Whilst we don’t the answers to these questions, we do know one thing for sure, and that is that our Noel Jones property experts are here to support you in any way that they can.