Melbourne property market Australia’s real estate growth capital

01 October 2015

Domain.com.au, 01 October 2015

By Kirsten Robb

Melbourne’s property market streaked away from the rest of the country over the September quarter, according to figures released Thursday, proving Australia’s most liveable city also boasts its strongest real estate market.

It comes as Domain data revealed the city saw a remarkable surge in auction numbers and a strong jump in median auction prices over September.

RP Data figures show dwelling values rose by 7.4 per cent in the quarter, nearly 3 per cent higher than Australia’s next strongest capital city, Sydney.

 

Change in dwelling values

 

Month

Quarter

YoY

Melbourne

2.4%

7.4%

14.2%

Brisbane

1.4%

1.9%

4.6%

Canberra

1.0%

-0.4%

0.6%

Combined capitals

0.9%

4.0%

11.0%

Perth

0.5%

-0.7%

-0.9%

Sydney

0.1%

4.6%

16.7%

Darwin

-0.3%

0.4%

-3.9%

Adelaide

-1.2%

-1.6%

-0.3%

Hobart

-1.9%

-2.0%

-0.2%

Source: CoreLogic RP Data

 

Sydney’s property market has been the subject of much debate in 2015, after the harbour city’s house prices hit a million dollar median in July. 

“This cycle has been much more a story about sydney,” RP Data head of research Tim Lawless said. “But this is the first time Melbourne has outperformed Sydney on a month on month and on a quarter basis, in this current cycle.”

This is the first time Melbourne has outperformed Sydney   Tim Lawless

The data shows Melbourne property owners have enjoyed a 14.2 per cent rise in values since September last year, slightly behind the 16.7 per cent jump in Sydney prices over the year.

But Domain data shows a significant cooling of the Sydney auction market in September – with clearance rates dropping below 70 per cent – while Melbourne auctions have only slightly come off the boil.   

Melbourne clearance rates dropped from 75.2 per cent in August to 73.2 per cent last month – the lowest rate recorded this year.

“Melbourne is now the capital of auction action, it’s now taken over from Sydney,” Andrew Wilson, Domain senior economist, said.

Melbourne’s median auction price increased by 13.1 per cent year-on-year, to reach a September average of $820,000.

Melbourne’s September auction clearance rate dropped slightly from the 75.2 per cent recorded in August.

Dr Wilson said the Melbourne had only marginally slipped back in comparison to other auction markets and noted how even the city’s market was across different regions and price points. 

He said a record surge in spring listings was likely to have influenced a consecutive four week drop in clearance rates, with Melbourne averaging 977 auctions each weekend in September, compared to a 640 average in September last year.

Buyers are also forking out more under the hammer, according to Dr Wilson. Domain data shows Melbourne’s median auction price soared by 13.1 per cent to $820,000 year-on-year in September.

Nelson Alexander director Arch Staver said buyer appetite was still meeting the extra supply, but buyers were becoming more discerning about what they wanted.

He said vendor expectations were also playing into the slip in clearance rates.

“Vendors have constantly been growing their expectations, [because] it’s been a strong market for a while,” he said. “Growth can only go so far at any point in time – at some stage it has to level off.”

Dr Wilson said, similar to the Sydney fall back, Melbourne was beginning signs of a fade and would likely hit clearance rates of below 70 per cent by the end of the year.

“I do think Melbourne is showing some early signs that the market is just tracking back a little,” he said, believing the next few weekends would be a massive test for the market.

Mr Lawless agreed conditions were looking good, but questioned how much longer prices could continue to sustain such significant growth.

“Melbourne [has] to cool down at some stage,” he said. “I would be very surprised if this time next year we are seeing more than 10 per cent growth per annum. I imagine it will drop back to something more reasoanble.”

The Melbourne market will largely shut down this weekend for the AFL Grand Final, with fewer than 50 auctions taking place, but will ramp back up again the following week with more than 1200 auctions scheduled. 

 

Read more:

http://www.domain.com.au/news/melbourne-property-market-australias-real-estate-growth-capital-20151001-gjyp47/ https://propertyshell.com

 

 

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