Melbourne: median house price rise a disadvantage for some

PropTrack is expecting 460 Victorian homes to go under the hammer this week.

A four-figure rebound in Melbourne’s median house price could be a mixed bag for buyers as competition increases at auctions and some properties become less affordable.

PropTrack is expecting 460 Victorian homes to go under the hammer this week ahead of the King’s birthday public holiday.

A PropTrack report this week showed that Melbourne’s typical house value increased by almost $8000 to reach $902,000 at the end of May.

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The increase was the city’s fifth straight month of growth and the single largest monthly rise since 2021 as other indicators revealed improving conditions.

Real Estate Institute of Victoria interim chief executive Jacob Caine said agents were seeing heightened buyer activity, increased bidding at auctions and more purchasers putting in pre-auction offers for homes.

“I haven’t heard a huge amount coming out of the marketplace that prices are jetting up, but generally speaking those other factors are really good signs that would also indicate that the prices are creeping up,” Mr Caine said.

“I think it’s absolutely fair to anticipate that as Melbourne house prices continue to creep back up to historic highs, that buyers will experience disappointment and frustration as properties that might have been achievable at the beginning of the year become less affordable and perhaps out of reach.”

Real Estate Institute of Victoria interim chief executive Jacob Caine.

Melbourne suburbs with the most auctions this week are Craigieburn with 14 homes set to go under the hammer, followed by Mount Waverley and Reservoir with 10 auctions each, according to PropTrack. Picture: NewsWire/David Crosling.

PropTrack senior economist Angus Moore said it was important note that Melbourne’s boosted median value would not necessarily translate to higher asking prices for all homes on the market.

“Obviously, rising home prices can make homes less affordable for first time buyers, though the fact that interest rates are falling is going to help improve affordability,” Mr Moore said.

“But the fact that we are seeing a reasonable volume of homes available for sale going to auction does give buyers a bit more choice.”

PropTrack economist Angus Moore.

This two-bedroom apartment at 2/51 Denham St, Hawthorn, will go under the hammer on Saturday. More than 140 groups have inspected the home, listed with The Agency Victoria’s Luke Saville.

Ray White, which represents 25 per cent of Melbourne’s auction market, recorded a $833,000 median price result from the 145 auctions that it held across the city last week, which was a 4 per cent rise when compared to 12 months prior.

According to PropTrack, Victoria achieved a 67 per cent auction clearance rate last week from 1537 auction results.

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