Melbourne’s Market Outlook For 2023 to 2024

In This Week’s How's The Market | Edition 68

  • Melbourne’s Market Outlook For 2023 to 2024

  • “The Market Is Hotter Than The Boom Of 2021”

  • Investor Exodus Gathers Pace In Melbourne


Melbourne’s Market Outlook For 2023 to 2024

The real estate markets in inner, middle, and outer Melbourne have recently demonstrated a noteworthy convergence, resulting in a period of widespread stability, an occurrence not observed in the city for several years.

Data from the Real Estate Institute of Victoria (REIV) indicates that both house and unit prices in all three concentric rings of Victoria's capital city have reported positive quarterly growth, a situation not witnessed since the June quarter of 2021. This data signifies a significant resurgence in the property market of Australia's now most populous city.

The surge in property values has been particularly pronounced in Melbourne's outer suburbs, with house prices increasing by 1.3 percent and unit prices by 1.8 percent over the three months leading to September. Notably, the city's top 20 suburbs, experiencing the most significant house price appreciation in the last quarter, were predominantly located in the outskirts. Remarkable increases were observed in areas like Keysborough (up 13.2 percent), Rye (13 percent), and Ringwood East (12.2 percent).

Coastal properties also remained highly sought after during this period, with substantial median price increases in locations such as Crib Point (40 percent), Somerville (22.3 percent), Tootgarook (16.8 percent), and Blairgowrie (17.7 percent).

In addition to this citywide growth, the eastern suburbs of Melbourne experienced robust price growth over the three months leading to September. This culminated in Upwey joining the million-dollar club, with a median house price of $1,060,000.

On the unit front, the median unit price in the Victorian capital increased by 1 percent during the same period, reaching $633,500. Toorak led the way in terms of price growth, with apartments in this affluent southeastern suburb surging by 39 percent to approximately $1.292 million. Following Toorak's lead, Bentleigh East, where prices increased by 5.6 percent over the quarter, emerged as the city's second most expensive unit market with a median price of $1.29 million. Brighton East, Brighton, and Glen Waverley completed the list of Melbourne's five most expensive unit markets in the last quarter.

Jacob Caine, the newly elected president of the REIV, expressed that these results were anticipated due to the recent trajectory of the market. He noted, "As expected, stability has continued into the latter half of 2023, with the quarter showing strong signs of recovery in property prices across Melbourne and regional Victoria."

In contrast to the metropolitan market, the state's regional market remained stable with no quarterly price change in the three months leading to September. House prices retained their June median price of $604,500, and unit prices remained at $416,500.

These findings align with CoreLogic's September Home Value Index, which reported a 0.4 percent increase in property values in the Victorian capital over the month, contributing to a 1.3 percent quarterly growth.

Caine believes that this data indicates that "for buyers, this is a good time to enter the market after a period of some uncertainty."

Moreover, Melbourne has experienced a surge in auction activity during the spring season, with over 1,000 homes going under the hammer during a recent weekend. Additionally, the Reserve Bank of Australia's decision to maintain the cash rate for the fourth consecutive time at its October board meeting has instilled greater confidence in the market.

What The Agents Are Saying

I caught up with a real estate agent this week in the Officer Pakenham market who said that in the last 2 to 3 weeks, the market has been hotter than the boom of 2021.

She is listing 4 - 6 properties a week at the moment and only holding 1 Saturday open for each, knowing that she will receive 4 - 7 offers by Monday based on the quality of the home.

There is that much demand in that marketplace right now.

Closer in and around the Glen Iris, Hawthorn & Richmond pockets, demand is also increasing, with some auctions being brought forward due to multiple pre-auction offers, however, this is nowhere near the same level as the outer southeast.

The Wow Factor!

64 Mapleson Drive, Traralgon, Vic 3844

Imagine you could buy a home with its own football field and a half basketball court on 1.1 hectares?

This grand Taralgon home is going for a record suburb price with these above features including a lake and a great outdoor entertaining area.

Check it out!

Price Guide: $1,789,000

In The Media 

Investor exodus gathers pace in Melbourne, Sydney

If you’ve been following our How’s The Market blogs and podcast for a few months, I’m sure you would have heard us talking about the amount of homes that we are going through in Melbourne that have been investment properties.

Most commonly, we hear agents say that their vendors have cited the increased taxes as being the predominant factor as to why they are selling.

Have a look at the stats this article has produced from CoreLogic showing the percentage of new listings coming to the market in the September quarter that have been investor-owned:

Melbourne City, Vic 60%

Port Phillip, Vic 56%

Geelong, Vic 52%

Yarra, Vic 50%

Glen Eira, Vic 44%

60% of all new properties coming onto the market in Melbourne City are investment properties right now!

And we are in a rental crisis with hundreds of thousands of more migrants moving to Victoria over the next few years who are unable to buy and must rent.

Final Thoughts

The Melbourne market is heating up, though not because of investors, and in fact it’s predominantly because of owner-occupiers buying up all of the investment properties coming onto the market.

With the inner, middle and outer rings of Melbourne all receiving positive quarterly price growth and all the experts predicting more significant price growth next year, it may just be a good time to buy if you’re currently out in the market.

Thanks for reading this far!

We value feedback and if you have any suggestions on what you would like covered in the future please email me at tristan@tomii.com.au

Happy Buying!

Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.

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