MELBOURNE’S median house price has risen for the fifth consecutive quarter, with the city remaining a “seller’s market”, but growth is tipped to cool.
The citywide median jumped 2.9 per cent to $822,000 in the three months to June 30, according to the Real Estate Institute of Victoria.
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It comes as the latest NAB Residential Property Survey predicted the Melbourne house market would continue to experience “solid, albeit slower, growth in prices” this year and next, with the gains ultimately returning to “more sustainable levels”.
It forecast house prices to grow 7.5 per cent this year and 5.5 per cent next — a fair drop-off from 2016’s 15.1 per cent gains.
The survey found housing market sentiment and confidence had fallen in the June quarter as local investors retreated, but first-home and foreign buyers were more active.
This was despite China’s crackdown on capital outflows into overseas property and a raft of new restrictions and taxes on foreign ownership introduced in the latest federal budget, NAB chief economist Alan Oster said.
The REIV data shows Melbourne’s middle and outer suburbs were the main drivers of the June quarterly growth, led by Croydon in the outer east, where the median soared 20.4 per cent to $810,000.
“It’s certainly a sellers’ market at present with strong competition for homes across the city, particularly in Melbourne’s more affordable areas,” REIV acting president Richard Simpson said.
Mr Simpson said more than half the city’s top growth suburbs in the most recent quarter were priced below the metropolitan median, including Broadmeadows, up 17.4 per cent, Deer Park, 16.9 per cent, Roxburgh Park and Melton West, both 14.1 per cent, and Mernda, 13.3 per cent.
The sustained growth was the result of unprecedented population increases, record low interest rates and strong buyer demand, he said.
A record 10,300 homes also went under the hammer in the June quarter.
CoreLogic state director for Victoria Geoff White expected the Melbourne median to continue to rise as the year went on, but said growth could moderate as a rush of homes hit the market in spring, giving buyers more choice.
“It will continue the way it is unless something changes — interest rates going up or unemployment growing,” he said.
The REIV figures show Melbourne’s apartment sector also performed strongly in the June quarter, with the citywide median up 4.3 per cent to $606,5000.
And house prices rose for the second consecutive quarter in regional Victoria, up 2 per cent to $385,000.
The NAB report tipped Armadale, Brighton, Footscray, Frankston, Kew, South Yarra, St Kilda and the CBD to enjoy “above average growth” in the next year.
MELBOURNE: THE JUNE QUARTER
Top growth suburbs
CROYDON: up 20.4% to $810,000
DONCASTER EAST: up 19.1% to $1.441m
MALVERN EAST: up 17.4% to $2.025m
BROADMEADOWS: up 17.4% to $540,000
DEER PARK: up 16.9% to $590,550
BEAUMARIS: up 14.6% to $1.69m
ROXBURGH PARK: up 14.1% to $513,500
MELTON WEST: up 14.1% to $397,000
TEMPLESTOWE LOWER: up 13.6% to $1.33m
MERNDA: up 13.3% to $521,250
Most affordable suburbs
MELTON SOUTH: $342,500
MELTON WEST: $397,000
WYNDHAM VALE: $450,000
Most expensive suburbs