The Melbourne suburbs where prices have soared by more than 25 per cent

 

 

House prices across 92 Melbourne suburbs have soared by double digits in the space of just one year, new data shows, as home buyers turn their backs on inner-city favourites and flock to leafy middle-ring and outer suburbs.

 

Melbourne’s median house price rose to a record $1,022,927 over the June quarter, with prices up 16.2 per cent over the past year, the latest Domain House Price Report showed.

 

But the biggest price hikes were not in the traditionally revered inner-city ring – instead, the report revealed Melbourne’s most sought after suburbs are changing, with house prices in suburbs further away from the city skyrocketing by more than 25 per cent.

 

Nine of the top 10 house price rises over the past year, excluding the Mornington Peninsula, were in suburbs at least 10km from the city, with Warrandyte in the city’s east leading the way.

 

House prices there rose by an incredible 25.8 per cent over the year to June to a $1.352 million median. Pascoe Vale South saw a similarly incredible leap, rising 25.4 per cent to a median of $1.154 million.

Experts say the rush to lifestyle suburbs has not only seen house prices soar, but it’s also seen those priced out of buying a house bidding on apartments instead – unit prices in some suburbs closer to the city have seen an upswing of more than 20 per cent.

 

Units have risen to a record median of $572,793, with suburbs geared towards owner-occupiers seeing the largest price rises.

 

Domain chief of research and economics Nicola Powell said Melbourne’s middle and outer suburbs had become hot property as people looking to upsize, improve their lifestyle and be comfortable working from home felt more confident buying further from the city.

With people saving more from staying at home during the pandemic, government discounts on stamp duty and record low interest rates, Melburnians had been given more buying power, Dr Powell said.

 

“It has seen some of the highest growth rates in Melbourne since the [Global Financial Crisis] recovery in 2009,” Dr Powell said.

 

Jellis Craig Doncaster director Chris Savvides said properties in areas like Warrandyte were selling quickly as cashed-up buyers raced to find larger houses with tennis courts and swimming pools on large blocks of land as lockdowns were lifted.

 

“Warrandyte has always been a popular area for local buyers wanting to upgrade from a three-or-four bedroom house to an acre but now these lifestyle properties have gone next-level,” Mr Savvides said.

 

While it was a popular place to buy, he said, it was becoming harder for people to find properties for sale. In Warrandyte, fewer were being listed and there was no land left for subdivision.

 

In the Lysterfield region and further afield in Belgrave and Upwey, buyers are moving from Melbourne’s inner suburbs.

 

O’Brien Real Estate’s Rebekah Whittaker said about 80 per cent of their buyers were coming from Fitzroy, Brunswick or St Kilda. Competition was so fierce, she added, the days a property spent on the market had dropped to just eight.

 

One recent property up for private sale, she said, had received 69 offers.

 

“We’re having to do everything online just because we can’t physically take that many offers for a private sale,” Ms Whittaker said.

 

While houses in the middle and outer-ring suburbs were in high demand, it was units in inner-city locations which had the highest price rises.

 

East Melbourne saw its unit median jump by 22.2 per cent to $835,000 while Thornbury also saw prices jump by 20.6 per cent to $621,250.

 

In Surrey Hills, unit prices lifted by an impressive 17.6 per cent to a median of $941,000.

Barry Plant Victoria director Mike McCarthy said units were being snapped up by downsizers, but also by buyers who were unable to afford a house in pricier suburbs.

 

“I think with the house price now being over $1 million affordability starts to kick in – if you can’t afford a house then you start to look at a unit or apartment,” he said.

 

Affordability was one of the reasons Timothy Kupsch bought an off-the-plan apartment in Surrey Hills.

He recently bought into the boutique Arbour Park development with views of Surrey Park, which was very important to the former 60 Minutes TV producer who has a Masters in Environmental Sciences.

 

It wasn’t the first property Mr Kupsch had bought in Surrey Hills. He previously bought a home in the same area as Melbourne’s house prices were in a downturn, but he found the house was too big for him to live in alone so he rented it out to his stepdaughter and grandchildren.

 

When he looked to buy another house in Surrey Hills last year, to be closer to them, prices had risen by at least $500,000 putting them well out of his budget.

 

“I wanted to lock in and future-proof myself and the apartment will be a good investment,” Mr Kupsch said. “Plus my five-year-old granddaughter loves the idea of going up there in an elevator.”

 

While apartments are offering some people a way into the market, Melburnians could be feeling affordability pain for some time to come.

 

AMP Capital chief economist Shane Oliver said he expected prices to keep rising, even outstripping the huge growth of house prices in Sydney.

 

“We could now see an element of catching up, if Melbourne manages to keep managing coronavirus well. It could go into a period where their rate of growth surpasses Sydney,” Dr Oliver said.

 

However, he added, the annual growth would not be as intense as the past year, slowing to about 5 per cent as tightening of bank lending standards, rising fixed mortgage rates and a decline in home-buyer incentives hit the market.

 

With Kate Burke

 

 

Ref: MELISSA HEAGNEY| SENIOR JOURNALIST  (on 31 Jul 2021). The Melbourne suburbs where prices have soared by more than 25 per cent. Retrieved from https://www.domain.com.au/news/the-melbourne-suburbs-where-prices-have-soared-by-more-than-25-per-cent-1076026/.

 

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