According to the Real Estate Institute of Victoria (REIV), Melbourne’s median house price dipped to $718,000 in the December quarter, down 1% from the $719,000 recorded in the September quarter, but the first price decline in the city after four straight quarters of growth is not the biggest story for the market.
“There was a marginal moderation for median house price over the quarter,” REIV spokesperson Paul Bird told Your Investment Property Magazine.
“But the real story for the quarter is the emergence of Melbourne’s outer suburbs. They’re really starting to get the attention of homeowners and investors who are looking further out from the CBD as they search for better affordability and better capital growth opportunities,” Bird said.
Across the city, Melbourne’s outer suburbs performed the best over the quarter.
Median house prices in outer Melbourne rose by 2.9% to $559,000, while the median unit price increased 3.2% to $425,000.
Warrandyte, in Melbourne’s outer north east was the best preforming housing market over the quarter, with its median price increasing 19%, while Greenvale in the outer north and Sunshine in the outer west both recorded growth of more than 17% for their median house prices.
The median price for a house in those suburbs between $600,000 and $1.1 million according to the REIV, but Bird said there are still other affordable options in Melbourne’s outer reaches that are performing well.
“It used to be you could find a house in a lot of the outer suburbs for around $320,000, but that’s getting pretty difficult now,” he said.
“You look at place like Werribee, it used to be one of those, but it’s the second cheapest suburb in Melbourne now and its median house price went up 11% in the quarter to $357,000.
“Even so, suburbs like Werribee, Wyndham Vale or Hoppers Crossing are an hour or 45 minutes from the CBD and you can still get a house for around $350,000 and that’s great affordability if you compare them to the price you would pay for a house in an equivalent suburb in Sydney.”
While Bird said the improved performance of Melbourne’s outer suburbs is in part due to the current upswing all of Melbourne is enjoying, there are some other factors at play as well.
“Part of it just the natural cycle, the inner areas of Melbourne have slowed a bit and now the outer areas are enjoying some growth.
“But there’s also been some great improvements in infrastructure for the outer suburbs, particularly in public transport and road transport, that have really opened the outer suburbs up to the rest of Melbourne.
“That’s helped as the owner occupiers are now looking at those suburbs because of the lifestyle factors they offer, while still being relatively close to the CBD.”
But while Melbourne’s outer fringe might present some bargains currently, Bird recommends getting in sooner rather than later.
“A lot of the activity at the moment is from home-owners, but we predict investor activity will pick up over the next year or so.
“When that happens I think you’re going to be hard pressed to find a house anywhere in that $350,000 to $400,000 range. “