The REIV has undertaken research to analyze fluctuations in the median price for property depending on the number of bedrooms and location. This research has shown that in the December quarter three bedroom homes in the north eastern suburbs were the most popular, recording a median increase in value of 5.5 percent for the quarter, compared to a decline of 0.9 per cent in Melbourne.
Also popular were two bedroom houses in Melbourne’s metropolitan north which recorded an increase in median value of 4.3 per cent and three bedroom homes in the Melbourne’s north east which increased by 4 per cent. These suburbs represent areas with established amenities and access to tram and train lines, whilst at the same time still remaining affordable.
Whilst homes in the north east, north and some western suburbs recorded stable median prices and in some case price growth, falls were generally recorded in the inner city, inner east and inner south. Areas that recorded a price drop are generally areas that underwent unsustainable growth during the property boom of 2007.
It’s no coincidence that the areas that are experiencing good growth are the parts of Melbourne priced at or below the metropolitan median. Buyers, particularly first home buyers are looking for value and that is driving price increases. These buyers are taking advantage of falling interest rates and government assistance.
Market conditions are providing opportunities for buyers that have not been seen in many years. These conditions may prove to be a catalyst for an increase in approvals for new dwellings. A substantial increase in the number of dwellings will increase the pool of housing stock; this will help ease vacancy rates and stabiles rents, which will be warmly welcomed by those that are not in a position to buy their own home.
