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Melbourne Property Market
According to the latest CoreLogic report, February has been a month of thriving activity, with the third week of February being the busiest week in their weekly records that run back to 2008.
Whilst there is was an abundance of activity this month, property prices in Melbourne have remained relatively flat showing no real growth over the month. In terms of new listings, Melbourne figures continued to rise, suggesting that auction volumes will remain high for now.
With the rise in the number of listings going to auction, many anticipated we would see a reduction to the auction clearance rate, however, figures indicate clearance rates are continuing to run in excess of 70 per cent.
Melbourne’s clearance rate was 71.0%, down from last week’s initial 74.2% reading.
Three of the eight capital cities are now recording a median house value over the $1 million dollar mark. Melbourne’s median house value surpassed $1 million for the first time in January, while Canberra recorded a median house value in excess of $1 million for the second consecutive month. In Sydney, the median house value is approaching the $1.4 million mark.
Melbourne’s housing market has recorded one of the lowest growth trends across the capital cities in recent months, posting a subtle 0.1% decline in housing values in December followed by a 0.2% rise in January. The past three months have seen Melbourne home values lift by 0.8%, the lowest rolling quarterly growth rate since the market emerged from the first round of lockdowns in November 2020.
While house values have continued to rise at a faster pace than units, the performance between the two housing types has narrowed since October last year, potentially reflecting increased demand for housing in the more affordable but higher density sector of the city. The upper quartile of Melbourne’s housing market has led the slowdown with the rolling three-month growth rate reducing from a cyclical high of 6.7% in April last year to just 0.1% growth over the three months to January.
With the re-opening of Australian borders underway, we believe Melbourne will benefit significantly. Melbourne is projected to be the fastest-growing capital city from 2023‑2024, overtaking Sydney to become the nation's largest city in 2029‑2030 with just over 5.9 million people. With a growing population, both from an overseas migration and natural migration into the city, the property market is set to reap rewards.
There is still a substantial amount of opportunity in the Melbourne property market, whilst growth might appear slow at present, there is no doubt, the market will gradually pick up as overseas migration does the same.
If you would like to discuss the Australian property market in more detail, please reach out to the team to organise a time to have a conversation about how Wealthi can help you build a successful property portfolio.
Chris Hynes is Wealthi’s Global Research Analyst, Based in London