Melbourne’s housing market was flat in March, thanks largely to poor performances in its inner suburbs.
Melbourne’s median house price has flatlined through March, with interstate homeowners now cashing out of other capitals and relocating here to beat mortgage pain.
The Victorian capital’s $1.015m typical house price gained $44,200 (3.1 per cent) in the past year, and not a cent in March, marking it as the poorest performing capital across the country.
Hobart had a similar zero growth margin in March, but achieved a much bigger $67,000 (9.5 per cent) annual uplift.
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Melbourne’s latest slump in PropTrack’s data allowed Adelaide’s $1.016m median price to move past it, cementing it as the nation’s sixth most expensive capital – with only Darwin and Hobart more affordable.
It also meant Melbourne was one of the few corners of the country not setting a new record for home values in March.
The data shows the flat period was led by falling values in some of the city’s once most-sought after areas, including inner suburbs, the inner and outer east.
It comes as buyer’s agents have revealed there are people cashing out of Brisbane, where the median price has more than doubled since the pandemic, and turning to Melbourne as a way to get a smaller mortgage and better control over the cost of living.
12 Lydhurst Court, Hoppers Crossing, is for sale at $1m-$1.05m — giving an idea of what you can get for the city’s median price.
Melbourne unit owners were better off, with the median value rising 0.6 per cent in the past month and $25,200 in the past year (4 per cent) to $633,000 at the end of March.
PropTrack senior economist Eleanor Creagh said Melbourne had taken a very different trajectory to Brisbane, Perth and Adelaide – where the market had experienced a once in 100-year boom since the pandemic.
She said Melbourne’s housing market, and particularly more affluence areas in the city’s inner suburbs, as well as its inner and outer eastern suburbs where monthly and quarterly data showed house values were falling.
“Premium markets are more exposed to higher borrowing costs, and that’s probably leading to a growth slow down – and we are seeing that in many other regions across the country,” Ms Creagh said.
PropTrack senior economist Eleanor Creagh says Melbourne’s premium suburbs were behind the city’s flat home values. Picture: John Gass.
However, more affordable units were holding up better, largely as a result of buoyant first-home buyer demand coming from the First Home Guarantee scheme.
Ms Creagh said this suggested that mortgages costs would be a factor.
Buyers advocacy firm LP Advisory’s Lou Lihari has been watching the city’s housing market fracture into two parts for the past few months, with homes priced below $750,000 “flying” and those above $1.5m “sitting on the market”.
A part of the more affordable homes selling well was ongoing demand from interstate investors, but Mr Lihari said their firm was also encountering growing demand from interstate buyers wanting to relocate to Melbourne.
“We are finding more of them are coming from Queensland who are venturing down … and they might be moving here with no mortgage,” he said.
5/18-20 Avalon Grove, Ringwood North, has a $610,000-$650,000 asking price — about the median for Melbourne units.
Ms Creagh added that interstate buyers looking to relocate to Melbourne would be possible as it had happened before when, ironically, people looked to buy in Brisbane and Adelaide for better value for money.
“So it wouldn’t surprise me that some are looking for value if they are able to expand their location choice and willing to do so,” she said.
With that interest combining with Australian Bureau of Statistics data released yesterday indicating Victoria led the nation’s population growth in the 2025 financial year with a 105,000 people increase, Mr Lihari said he was expecting Melbourne would soon return to climbing the ladder.
“But we are the best city in the world, and with population growth it’s inevitable we will see the home price rise,” he said.
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