Demand for larger homes in Melbourne

The desire for space is driving demand for larger homes in Melbourne – a trend reflected in capital gain in the busy December quarter of last year and across 2014.

Four bedroom homes in Brighton East and Balwyn were among the property types showing the largest capital gain in the December quarter – 8.5 per cent for Brighton East and 9.1 per cent for Balwyn, with the median price for a four bedroom home in Balwyn reaching $1.8 million. For Brighton East the median was $1.475 million.

Three-bedroom homes in Malvern East and Balwyn North were among those with the largest increase in median price in 2014 – 22 per cent in Malvern East, taking the median price for three bedrooms to $1.185 million, and 20.1 per cent in Balwyn North, with a median of $1.3 million.

Toorak, popular with apartment-buying downsizers wanting a smaller, low-maintenance property without leaving the area, showed excellent capital growth on two-bedroom apartments: 8.4 per cent in the December quarter, taking the median price to $812,750.

This trend was reflected across inner and middle Melbourne, with median prices for three and four bedroom homes showing greater capital gain than smaller homes in both the December quarter and 2014 as a whole. This also applied to apartment prices in those areas.

The exception was one-bedroom apartments in outer Melbourne, with a capital growth of 18.7 per cent in 2014 – a reflection of shortage of supply and increasing interest from investors in those areas.