The housing market of Victoria has registered its biggest median-price growth since 2000, according to the latest report from the Real Estate Institute of Victoria (REIV).
The report, which provides a snapshot of the price movements in the last three months of 2020, showed that house prices in Melbourne have surpassed $900,000 for the first time, jumping by 9.5% to $941,000.
According to REIV, households found an opportunity during the lockdown to make some upgrades and renovations, boosting the value of their homes. This was apparent in the middle-ring suburbs in Melbourne, where prices increased by 8% on a quarterly basis to $1.06m.
Units in Melbourne also increased over the quarter, up by 2.5% to $639,500.
Regional Victoria also posted a substantial growth, hitting its highest level since 2003. Dwelling values increased by 9.2% for houses and 3.5% for units.
The property sector reported a surge in activity during the December quarter following the lifting of intensive lockdowns. Over the three-month period, around 29,500 transactions were recorded. This level exceeded the number of activities recorded over the first quarter of 2020, said Leah Calnan, president of REIV.
"Throughout the July and September quarters, we received constant reports of low listings and activity. Once restrictions across the state eased, demand and buyer competition skyrocketed," she said.
Calnan said that the current market conditions are supporting the property market despite the impacts of the COVID-19 outbreak on the economy.
"Low interest rates and government incentives including stamp duty concessions and first home buyers grants added to buyer appetite for the December quarter, while volatility and uncertainty in the Australian equity market have secured property as a preferred investment option for Victorians," she said.