PropTrack: Melb six months from record prices

Melbourne’s property market is about to be ‘on like Donkey Kong’ with unit and house values surging at some of their fastest rates in years.

Melbourne house prices gained a nation-leading $250 a day in May with experts revealing the city’s median could be back to record levels of more than $960,000 by Christmas.

PropTrack figures released today show the city’s fifth straight month of home price growth added almost $8000 (0.87 per cent) to the city’s $902,000 typical house value across the past 31 days.

Senior economist Eleanor Creagh said the past month was Melbourne’s biggest single month of growth for house prices since 2021.

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On its current trajectory of 1.6 per cent a quarter, Ms Creagh said the city would achieve a 6.7 per cent resurgence over the next 12 months — enough to smash through its previous median price record in about six months’ time.

“Melbourne has been underperforming for much of the past five years, and it’s now one of the more affordable capitals,” Ms Creagh said.

“But with interest rates falling, seeing renewed competition and improving buyer sentiment, it’s all proving to be the catalyst to reversing the relative weakness that we have seen in Melbourne.”

However, the economist noted it was not guaranteed that the city would maintain its current high rate of growth and a 4-5 per cent uplift was more likely for the coming 12 months.

This would delay the return to peak prices until next year.

PropTrack senior economist Eleanor Creagh has revealed Melbourne could be as little as six months away from record house prices returning.

Real Estate Buyers’ Agents Association of Australia Victorian representative Matthew Scafidi said the end of Melbourne’s buyers market was “right now”, and he believed growth would continue at higher rates in the months ahead.

“There’s no more buyer’s market, it has swung back in favour of vendors,” Mr Scafidi said.

“Melbourne is back in a big way.”

The Abode Advocacy Group buyer’s agent said that about two weeks ago a switch had been flicked, with auctions more competitive, more homebuyers at inspections and he was now advising owners planning to sell to buy first – then list their home, as the market would likely give them a boost.

“And when the Reserve Bank meets next, we might get another drop in interest rates — if we do, it will be on like Donkey Kong,” Mr Scafidi said.

Melbourne’s median unit price also gained ground in May, rising almost $2000 (0.31 per cent) to $588,000.

Melbourne and its suburbs have underperformed other housing markets, but are quickly reversing the trend. Picture: David Caird.

On current trends, both houses and units are as little as a month away from recording their first 12 month growth cycle since 2023.

Across regional Victoria the median house price rose 0.18 per cent to $602,000, while the typical unit outside of the metropolitan area now costs $414,000 after a 0.17 per cent rise in May.

Much of the wider growth was a result of more significant increases in areas around the Hume region, up 4.56 per cent in the past year to $564,000, the Bendigo area, where the median rose 2.45 per cent to $587,000, and Warrnambool and surrounds, which gained 2.39 per cent to reach $521,000.

Melbourne’s top performing areas were the city’s south east, where values rose 1.5 per cent in the past year to $787,000, and the north east where they gained 0.96 per cent and the typical home now costs $721,000.

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