Data from industry body the Real Estate Insitute of Victoria (REIV) reveals properties are being tightly held in inner Melbourne, as vendors wait out a period of sluggish growth.
Amid the doom and gloom, Melbourne's median house price is actually on the rise, according to data from the REIV.
Over the past 12 months, there has been a 13.6 per cent increase in the value of homes sold privately and a 0.6 per cent increase in the value of those sold at auction.
"We’ve all heard the ‘doom and gloom’ commentary about a downturn in Melbourne’s property market but the median house price has actually increased five per cent in the past 12 months,” REIV President Robyn Waters said.
“The property boom of 2017 could not be sustained and a levelling or correction of the market is a good thing in the context of housing affordability already being a pressing issue in Melbourne," she told WILLIAMS MEDIA.
But Ms Waters told WILLIAMS MEDIA residents in the inner suburbs are holding onto their properties as they wait out a period of sluggish growth.
“Properties are being tightly held in inner Melbourne as vendors wait out this period while the market in outer Melbourne and regional Victoria are stronger as buyers are inclined to snap up more affordable options."
Pictured: 74 Freeman Street, Fitzroy North. Sold by Arch Staver and David Sanguinedo of Nelson Alexander. As seen on Luxury List.
"It fits with what we're seeing in the market more broadly," Ms Waters told WILLIAMS MEDIA.
“There is no doubt that the banks’ tighter lending conditions are contributing to this trend, as are incentives for first home buyers which encourage the purchase of affordable properties, more likely to be found in outer Melbourne or regional Victoria.”
Source: CoreLogic.
CoreLogic data also reveals dwelling values have fallen by -2.9 per cent in Melbourne.
"Over recent months the rate of decline has been gathering pace and it is the higher value areas of the city in which the declines have been greatest so far," CoreLogic Head of Research Tim Lawless told WILLIAMS MEDIA.
Mr Lawless says the largest falls to-date have been recorded in the Inner East (-6.3 per cent) and Inner South (-4.5 per cent).
"These two regions also recorded the largest value falls over the previous two Melbourne housing market downturns."
Strong price growth in the middle to outer ring
Over the last 12 months, the median house price in outer Melbourne rose 7.1 per cent, while the unit median rose by 9.8 per cent.
“Most of the standout suburbs are located in the middle and outer ring: Mount Eliza, Essendon, Keysborough, Coburg, Greenvale and Narre Warren South," Ms Waters said.
Pictured: 1 Brookwood Drive, Mount Eliza. For sale through James Merchan and Adam Hanley of Impact Realty Group. As seen on Luxury List.
Regional Victoria outperformed Melbourne, with a 9.1 per cent increase in the median house price.
It fits with the latest McGrath report, which says nine of Melbourne's top 10 suburbs for median house price growth are located in the middle to outer ring areas.
John McGrath says the best performing suburbs are Coolaroo with a 37 per cent growth, Melton South (32 per cent), Melton (27 per cent), Sanctuary Lakes (29 per cent), and Sunbury (26 per cent).
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