Australia’s property prices recently dropped for the first time in years, but many suburbs in Melbourne’s inner east are defying the downturn. New CoreLogic data has revealed 30 inner eastern suburbs had a median value at or above $1 million, with Deepdene and Canterbury boasting some of the biggest increases in Victoria.
The median dwelling value in Deepdene hit $3.26 million in May this year, compared to $3.16 million at the same time last year. In Canterbury, the median is $3.1 million – $300,000 higher than the 12 months prior. Several inner eastern suburbs – Chirnside Park, Knoxfield, Ringwood and Kilsyth South – also cracked the $1 million median mark for the first time.
Despite these positive figures, the wider market is softening, with CoreLogic reporting a national price fall of 0.6% in June. In Melbourne, prices fell 1.1% in June and 1.8% over the previous three months. This means the average house in our city is now selling for $975,850 – short of the $1 million median reached in January this year.
Melbourne’s properties rose 3.1% in value in the past 12 months, and the recent drop follows two years of record growth and coincides with the May interest rate rise, which is one of the drivers of the post-pandemic price dip. The likelihood of future rate hikes is also a powerful contributor, along with high inflation, slow wage growth and new lending restrictions imposed on buyers.
A slightly cooler market would be welcome news to aspiring homeowners, who can tap into the new federal Labor government’s schemes aimed at helping first home buyers, single parents and low-income earners get into the market sooner. Residential real estate is still Australia’s most valuable market overall, with its worth topping $9.9 trillion this year.
Director of Noel Jones Croydon, Warren Paas said despite some uncertainty, many homes were selling with strong results, pointing to the recent competitive auction of a four-bedroom Warranwood home.
“The vendors had completed an extensive renovation and were concerned the home wouldn’t be fully appreciated in the current market,” said Mr Paas. “Our team helped put their minds at ease and ensured that the property’s advertising and styling truly reflected its value – the result speaks for itself.”
The property sold for $1.517 million, with 10 offers at the auction after spending just 12 days on the market. “The vendors had hoped for $1.3 million, so to beat that by more than $200,000 in this climate is a solid result. They were thrilled.”
While some buyers may be initially hesitant, it is not yet translating into less listings in Melbourne. Figures from Domain show in May, new listings jumped by 25% in our city, more than double that of Sydney (12%).
Noel Jones also helped a three-bedroom home in Mitcham sell ahead of auction well above reserve after receiving five offers. Noel Jones Mitcham’s Director Mike Muncey said there were plenty of passionate bidders willing to battle it out for good homes, describing a fiery June 25 auction.
“We had two strong bidders who battled it out for 1/56 Percy Street, and it ultimately sold significantly over the reserve,” Mr Muncey said. “Noel Jones is a trusted pair of hands in property because we aim to deliver consistent results in any market conditions.”
Noel Jones will continue to monitor the impact of interest rate rises, lending limits and other economic factors on the property market. The long-term effect of these factors on price growth remains to be seen. If you have questions about the current market or want to discuss your next property move, get in touch with your nearest Noel Jones office.