Melbourne median house price falls below $1 million

Melbourne’s median metropolitan house price has slipped below the million-dollar mark but rents keep rising.

Brick veneer townhouses in Melbourne
Rents are on the up while property prices are heading in the opposite direction in Melbourne. (Image source:

Melbourne’s median metropolitan house price has slipped below the magic million-dollar mark.

The REIV’s September Quarterly Median Report reveals that Melbourne metropolitan house prices fell 7.4 per cent during the quarter to $993,000.

While rents continue to head the other direction, buyers have responded to five consecutive monthly interest rate hikes by sitting out of the market.

Across the city, 40 suburbs recorded house and unit rent rises of 10 per cent or more, Domain’s latest rent report, shows. Hundreds more suburbs had rents rise by at least 5 per cent.

Leading the rental charge was Black Rock, with a median weekly asking rent of $995, a rise of 19.2 per cent. Aspendale ($650, 18.2 per cent), Botanic Ridge ($500, 16.3 per cent), Beaconsfield ($485, 15.5 per cent) and Travancore ($535, 15.1 per cent) rounded out the top five for fastest rising rents.

Investors are among the section of buyers steering clear of the market at the moment but first-home buyers are generating strong demand for townhouses and units in particular.

  Sep-22 Quarter Jun-22 Quarter Quarterly Change 12 months to Sep-22 12 months to Sep-21 Annual Change
Metropolitan Melbourne
House $993,000 $1,072,500 -7.4% $1,090,000 $1,000,000 9.0%
Unit and Apartment $648,500 $667,000 -2.8% $675,000 $665,000 1.5%
Regional Victoria
House $603,000 $620,500 -2.8% $611,000 $529,000 15.5%
Unit and Apartment $422,500 $432,500 -2.3% $425,000 $380,000 11.8%
  Sep-22 Quarter Jun-22 Quarter Quarterly Change 12 months to Sep-22 12 months to Sep-21 Annual Change
Inner Melbourne
House $1,677,500 $1,745,500 -3.9% $1,769,500 $1,695,000 4.4%
Unit and Apartment $618,500 $644,000 -4.0% $650,000 $644,500 0.9%
Middle Melbourne
House $1,139,000 $1,215,000 -6.3% $1,225,000 $1,180,000 3.8%
Unit and Apartment $728,000 $734,000 -0.8% $750,000 $750,000 0.0%
Outer Melbourne
House $822,500 $851,500 -3.4% $845,000 $776,000 8.9%
Unit and Apartment $613,000 $625,500 -2.0% $625,000 $600,000 4.2%
  Sep-22 Quarter Jun-22 Quarter Quarterly Change 12 months to Sep-22 12 months to Sep-21 Annual Change

Source: REIV

A lack of new rental supply to alleviate the tight rental market does not appear likely to be alleviated any time soon if auction activity is anything to go by.

Fewer than half the number of auctions were held this week compared to the same time last year. Auction activity across Melbourne trended lower this week, with 683 homes auctioned across the city, down 8.1 on the previous week.

Despite the house price declines, many million-dollar suburbs continued to climb quarter-on-quarter, including Williamstown ($1,650,000) with 8.6 per cent growth, Surrey Hills ($2,166,500) with 6.2 per cent growth, Mount Waverley ($1,592,500) with 4.0 per cent growth, Keysborough ($1,010,000) with 3.1 per cent growth and Burwood ($1,400,000) with 1.0 per cent growth.

Slower regional declines

Across regional Victoria, median prices for both houses and units demonstrated greater resilience, with houses falling 2.8 per cent to $603,000 and units falling 2.3 per cent to $422,500, this quarter.

The top regional suburbs delivering house price growth during the quarter were Heathcote ($570,000), Morwell ($354,000) and Wodonga ($530,000). 

Annual median data reveals Victoria’s property sector has shown solid growth over the past 12-months. Regional Victorian houses and units delivered double-digit annual growth in the 12-month period, with house prices climbing 15.5 per cent. In metropolitan Melbourne, house prices rose 9.0 per cent since September 2021. 

REIV President Andrew Meehan said the September quarter had created attractive buying opportunities for Victorians, while strong longer-term market fundamentals prevail. 

“Lower median prices through the September quarter have created new opportunities for Victorians to buy more affordably in Melbourne, particularly in the outer suburbs. 

The upward trends we continue to see in the annual data suggest there is significant long-term confidence underpinning both transaction activity and real estate prices across the state,” Mr Meehan said. 

“It is pleasing to see property transactions have not slowed materially, with a high volume of vendors listing their properties and plenty of undeterred buyers.

“Looking ahead, these factors, combined with the RBA’s lower-than-expected rate rise in October, are an encouraging sign of our real estate market’s long-term health.”  

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