July 17, 2014
NEW figures from the Real Estate Institute of Victoria have revealed Melbourne’s median house price has hit its highest ever level, $658,000.
The new median marks a $22,000 (3.3 per cent) lift in the past three months based on the prices achieved in property sales between March and June.
The figures paint a rosier picture for the Melbourne housing market than a Reserve Bank of Australia report released yesterday, which found renting is just as good as buying in Australia.
The RBA’s Is Housing Overvalued report indicated that nationwide home values have risen an average 2.4 per cent a year in real terms (corrected for inflation) over the past 60 years — and that house prices would need to gain 2.9 per cent per year to provide a better option than renting in the future.
But the release of the latest growth REIV figures stretching back to 1966, a 48-year period, indicates house prices in Melbourne have grown an average 3.8 per cent per year, in real terms, over the period.
Enzo Raimondo, REIV chief executive, said in the past 20 years the figure had been closer to five per cent growth.
“Bricks and mortar are still providing a rock solid, long-term investment, as shown by these figures going back to the mid-1960s,” Mr Raimondo said.
“(And) the market continues to grow and is expected to for some time, representing real opportunities for owner occupiers and investors.”
Mr Raimondo noted the city’s middle-ring suburbs had received the best of growth over the past three months, with a new median house price of $720,000 achieved over the past three months.
The Institute’s figures show Melbourne’s median unit price is now also at a record level of $502,000.
Part of the success of units appeared to be in the inner-Melbourne apartment market where prices grew by three per cent across the three-month period, according to Mr Raimondo.
“Apartments in the inner-city, which had previously suffered from an oversupply, also showed strong growth as Melburnians embrace inner-city apartment living,” he said.
Mr Raimondo said low interest rates and strong activity from investors had prompted the growth.