Stability in the face of economic pressures

FOLLOWING TWELVE INTEREST RATE RISES OVER 12 MONTHS, GROWTH IN THE HOUSING MARKET HAS SLOWED ACROSS THE COUNTRY, BUT WE HAVEN’T SEEN THE EXTREME FALLS THAT WERE FEARED BY MANY ECONOMISTS.

Victoria residential real estate has recorded varying levels of impact. Metropolitan houses recorded a drop for the sixth consecutive quarter with 1.1 per cent in June quarter 2023 while units recorded 3.2 per cent increase over the same period. Homes in regional Victoria finished the quarter ahead by 0.6 per cent and a 2.6 per cent decrease in median unit prices.

The price stability in the current economic environment demonstrates the sustained buyer demand in a market with relatively low supply.

TOP PERFORMING AFFORDABLE METRO SUBURBS IN FINANCIAL YEAR 2022-2023

Over the 12 months to June 2023, many suburbs have recorded growth, notable of those being the more affordable areas with median house prices under $700,000. Cobblebank and Harkness, in the City of Melton, with a 8.3 per cent and 6.3 per cent annual increase in the median house price and Hastings and Caroline Springs with at least 13 per cent annual growth in the unit median price.

TOP PERFORMING AFFORDABLE REGIONAL SUBURBS IN FINANCIAL YEAR 2022-2023

Swan Hill is the top performing regional town for houses with over 30 per cent annual growth on its median price, while remaining below $500,000. For units, Bairnsdale has shown significant increases with 37 per cent annual growth to $368,500.

Kyabram in Campaspe recorded great results for the year with both house and unit median prices growing more than 20 per cent.

Auctions Increasing In Popularity

The average auction clearance rate in Victoria in 2023 so far is 76 per cent, higher than the average for first six months in 2022 (74 per cent) and all of 2022 (72 per cent). Looking at suburbs that have held at least 5 auctions in the first six months of 2023, REIV records show ten suburbs that have already surpassed their total number of auction sales in 2022, with another six months of this year still to go. Suburbs in Outer Melbourne dominate this trend towards, led by Bonnie Brook. Bellfield is the only suburb within 10 kilometers from CBD that has achieved the feat with an impressive clearance rate of 92.3 per cent.

This trend is spread across Melbourne with Bonnie Brook and Thornhill Park in the west, Donnybrook in the north and Baxter in the Mornington Peninsula. Three suburbs are located in southeast region with both Hallam and Lynbrook in Casey and Carrum Downs in Frankston area. Regional Victoria is part of this trend too with Romsey and Cohuna.

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DAYS ON MARKET – PRIVATE SALES

The days on market for private sales listings in metropolitan Melbourne has remained relatively stable over the past year at 38 days in June 2023. On the other hand, regional Victoria homes have struggled a bit with 48 days on market in the same month as compared to days on market at below 40 days over December 2020 to April 2022.

Hastings from Mornington Peninsula is the best performing suburb in the state when observing the improvement on time taken to sell a property. Twelve months ago, it took 59 days to sell a private listing in Hastings dropping to just 25 days on market in June 2023. The median prices for Hastings are also affordable with both house and unit sitting at $682,000 and $510,000 respectively. Three towns in regional Victoria recorded quicker selling times. Swan Hill in the northwest

Victoria slashed 26 days over the year, now it only takes 21 days to sell a property via private treaty – second shortest day on market among regional towns behind Wangaratta (20 days).

SUBURBS RETURNING TO THE $1 MILLION MEDIAN HOUSE PRICE GROUP

REIV data shows 169 metro suburbs with a quarterly house median price of $1 million or more, none of these suburbs are new entrants. In fact, the list below shows suburbs that have returned to the $1 million median mark after dipping below this threshold in recent times.

Price stability prevails across Victoria’s property market despite macro-economic and policy pressures, with attractive selling and buying windows opening for participants in both metropolitan and regional.

Table 3 Suburbs That Have Recorded Significant Increase In Auction Sales In 2023

Table 4 Biggest Improvement On Selling Time Via Private Treaty In June 2023

Metropolitan Melbourne Regional Victoria