From our corporate director

Dean O’Brien

Year on year, the median house price is $100,000 less

With this being our first where real estate information is on the house.

With this being our first edition for 2023 I thought we combine results for both December and January with an updated market information share.

This time last year the median value for a house in Melbourne for the first time ever hit $1 million according to Corelogic’s home index, and today if you’re looking to buy a house rather than a unit, you can expect the median value of that house to be $100,000 less than this time last year. If we look at Sydney, the median value for houses and units has now dropped to be under $1 million, that’s quite a change. However, the declines in we have been experiencing over the last 12 months are definitely easing. January has not been a quiet month, with overseas student numbers surging we are experiencing huge rental demands and particularly from Chinese students which is due authorities no longer recognising online studies as part of an academic degree or diploma. We expect the coming months to continue to be very strong and some of this rental demand to transfer into buying. The ASX 200 was also strong in January, it has its best January since 1994, increasing 6.2% for the month which is stark contract to January last year when it had it’s worst start to the year in 14 years.

No doubt, people, will be closely listening to the Reverse Bank’s announcement next Tuesday but it’s the comments from the Reserve Bank governor that will be even more important, because the market has already factored in the rate rise this February, so it is the future indications from the Reserve Bank governor that people should be listening into.

Melbourne Metro declines in the Home Value Index) over January fell 1.1%, and on a 12 month rolling average Melbourne prices are now 9.3% down for all dwelling types. Regional Victoria has also had a decline similar to last month easing 0.7%. Regional Victoria is now 3.5% down over the last 12 months, however let’s not forget that Regional prices in the previous rolling 12 month period grew an impressive 23.9%.

Looking at the rental market, rents in Metro Melbourne for units is in strong demand, people are now wanting to be close to universities and transport links again and in the Inner Melbourne market we have experienced a 30% increase in rents over the last 12 months and there are no signs of that slowing. Gross yields of units for investors is increasing strongly as you would expect with units now at 4.3% in Metro Melbourne and 4.5% in Regional Victoria, whereas this time last year we were sitting at 3.5% as a gross yield for Metro Melbourne.

That’s all for this month and remember the information provided is of a general nature you should always seek independent legal, financial, taxation or other advice in relation to your unique circumstances.