Melbourne home values rise 6.1 per cent to close out 2019
The Melbourne market ended 2019 on a high, with home values rising more than 6 per cent in the final three months of the year.
This meant the city rang in the new year in positive territory, with house and unit values 5.3 per cent higher than they were at the end of 2018 at a $672,996 median, CoreLogic’s latest Hedonic Home Values Index shows.
Melbourne’s inner east was the nation’s best performing capital city market of 2019, with dwelling values soaring 12.1 per cent to a $1.195 million median.
The city’s inner (up 8 per cent) and inner south (7.6 per cent) regions also starred, while the Warrnambool and South West area (4.5 per cent) and Bendigo (2.8 per cent) were among Australia’s top regional growth spots.
CoreLogic head of research Tim Lawless said Victoria’s capital hadn’t entirely recovered from the price wipe-out caused by the downturn of late 2017 to mid 2019. But he expected Melbourne to hit a new housing high in the opening months of 2020.
He labelled 2019 “a year of two distinct halves”, in which values across the combined capitals fell 3.8 per cent in the first six months and then rebounded 7 per cent in the second half.
That rebound was spurred by low interest rates, a relaxation of borrower serviceability assessments, improved housing affordability, limited available housing stock, and “renewed certainty around property taxation policies” following the Coalition’s federal election win.
Advantage Property Consulting director Frank Valentic said the resurgence started “as soon as the election finished”, and had been full-steam ahead since.
Investors had flooded back into the market “like sheep”, auction clearance rates jumped 25 per cent and properties began regularly smashing reserves by 20 per cent.
The buyer’s advocate pointed to an old commission house at 41 Henty St, Reservoir, which attracted eight bidders to sell $220,000 above reserve for $940,000 in December.
“My advice to buyers (in the new year) is don’t hesitate or procrastinate or you’re going to pay more,” he said.
Mr Lawless did note the pace of growth had slowed since October, when Melbourne recorded its “largest month-on-month gain since November 2009” of 2.3 per cent. Values increased 1.4 per cent in December.
He tipped a more modest growth rate for 2020, with the “rapid rise” seen in the second half of 2019 to be tempered by worsening housing affordability and an increase in homes hitting the market.
The other capitals recorded annual losses, ranging from Adelaide’s 0.3 per cent decline through to Darwin’s 9.7 per cent plunge.