House price growth continued in regional Victoria, but not in Melbourne: REIV

New REIV data reveals that price growth continued in regional Victoria, but not in Melbourne during the three months ended 30 June 2018.

While median house prices in the state’s regions rose four per cent to $419,500, they dipped by 0.6 per cent to $840,000 in the Melbourne metro area.

The result in Melbourne was due to a fall of 0.8 per cent in median prices achieved at auction, according to the REIV, defying the median lift of 2.3 per cent in private sales of houses.

The correction was apparent in Inner Melbourne, where the overall median house price dropped 4.9 per cent to $1,459,000 and in Middle Melbourne, which fell 5.4 per cent to $974,500.

The Outer Melbourne house median edged up by 0.5 per cent to $681,000.

Unit and apartment median price in regional Victoria increased by 3.7 per cent to $304,500, while the metro median was up by 0.5 per cent to $604,000, indicating a continued interest in smaller properties.

REIV President Richard Simpson said that despite lower auction clearance rates and fewer overall sales, there were some sectors of the market that were still performing well.

“2017 was a bumper year and while the trendline has flattened, despite the fall in median house prices in the June quarter, median prices are still up this calendar year for both houses and units, in Melbourne and in the regions,” Mr Simpson said.

“There was continued growth last quarter outside Melbourne, and not just in, or near, our major regional centres of Geelong, Ballarat and Bendigo.

“The best performing regional suburbs over the past three months were Wonthaggi, on the Bass Coast, where the median house price jumped 14.9 per cent to $309,000; Kyneton, in the Macedon Ranges, with a 10.7 per cent rise to $570,000; and Wallan, in Mitchell Shire, where the median increased by 10.5 per cent in the quarter to $484,000.

“The first-home buyers’ concession has been a boon for regional areas. A new entrant to the property market buying a house at the regional median will pay no stamp duty, while a first home buyer of an apartment in Melbourne at the median price would pay stamp duty of nearly $25,000.

“Whether for reasons of housing price or a change in lifestyle, more prospective buyers are willing to look to regional Victoria to purchase. The possibilities of better transport connections with Melbourne make that option even more palatable.

“Melbourne's outer perimeter continues to grow. Small increases in the June quarter mean that the median prices for both houses and units have risen over 10.5 per cent from a year ago.

“Auctions continue to be popular all over Melbourne, but clearance rates have fallen from the lofty highs of early 2017,” Mr Simpson said.