Property prices in Melbourne is affected by interest rates. There is also the supply and
Check the Process of buying a property in Melbourne Australia here.
Melbourne property real estate market is being carried by strong demand for traditionally
working class suburbs, where median values for houses are less than $500,000. Click here
to find where to buy property in Melbourne for budgets from 200,000, 300,000 and above
The once-darling top-end suburbs by comparison, where median values are more than $1
million, are now dragging the chain.
The situation today is at odds with the state-of-play last year, when beleaguered owners of
properties in working class suburbs were forced to sell in an oversupplied market, because
of a rising interest rate environment, and sharp increases in living expenses, particularly
Five of the suburbs in last year’s top ten best performing suburbs had a median of over $1
million. The most affordable suburb in that list was Ashwood in the south-east, with a
median house price of $624,500.
By comparison, nine of the ten best performing suburbs have median values of less than
$400,000. The most expensive suburb, Keilor in the north-west has a median of $535,000,
and ranked eighth on the REIV’s list.
The good news, in the short term, is that there appears enough demand for affordable and
middle tier suburbs, such as Broadmeadows, Tullamarine and Dandenong, to cover losses
recorded by ritzier suburbs, including Malvern, Toorak and East Hawthorn.
This has resulted in what some may consider a surprise overall increase in Melbourne’s
median house prices, by 4.3 per cent, to $456,000, for the year to the early 2009. This rise
follows another increase reported last year, of 13.5 per cent, to $430,000.
Melbourne’s median flat and unit price also increased modestly up to the end of February
2009, by 2.3 per cent, to $373,500.
On the whole many commentators agree, Melbourne’s real estate market seems to have
weathered the storm of the Global Financial Crisis so far, bruised in parts, but relatively
But the Melbourne property real estate market cannot be assessed as a whole. Not
The sub-$500,000 market, five to seven kilometres from the CBD, is very strong, but the next
price bracket, $500,000 to $800,000, in the same location, is probably a little softer.
Interest rates, unemployment and government assistance, are all proving to be key drivers
in these markets, but are resulting in different outcomes within these two areas of the
The cost of renting a two bedroom inner-city unit for $1,800 per calendar month, compares
to the cost of servicing a mortgage, of about $2,500 a month, making the difference an extra
$175 per week, for an asset one can own.
Dual income professional couples, key players in the more expensive $500,000 to $800,000
market, are generally not as comfortable to service new debt, while job insecurity is an
North-west suburb of Westmeadows, abutting the Melbourne Airport and behind The Age
Print Centre, is Melbourne’s best performing suburb for the year 2009, with a median value
of $330,000, up 20 per cent.
Westmeadows ranked as the fourth worst performing suburb, recording a 3 per cent drop
in median value, to $267,000.
Four suburbs revered as amongst the best performers are now amongst Melbourne’s worst
performers. These include Mont Albert North, which tops the list as Melbourne’s worst
performing suburb after recording
a 16.1 per cent drop in median value, to $675,000.
The other fall from grace suburbs are Kew, where the median value is now $1,245,000,
down 9.9 per cent, Ashburton median of $750,000, down 9.3 per cent, and Malvern, median
of $1,310,000, down 11.8 per cent.
Toorak which is Melbourne’s most expensive suburb reported a drop in median value for the
year – sliding 11.3 per cent to $2,465,000. However, Toorak still ranks as the best
performing metropolitan suburb over five-years, recording an average growth rate of 13.4
The worst ten performing suburbs, recording negative median value growth, are the
suburbs of Kew East, Hawthorn East, Fairfield, Brunswick West and Brighton.
Melbourne’s population is growing much faster than expected, so much so, the Victorian
Government is redrawing the Urban Growth Boundary, to allow for enough new dwellings
over the next 20 years, to cope with an anticipated rise in demand.
The REIV statistics quoted throughout this page compare Melbourne’s median house and
unit and apartment price for the year ended February 28, 2009.
Check the House affordability in Melbourne.
Check the Unit affordability in Melbourne.
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Property prices in Melbourne Australia