Coastal suburbs, regional towns dominate city’s price growth

Melbourne’s coastal suburbs and regional towns are dominating the top spots for house price growth, according to data from Real Estate Institute of Victoria’s March quarterly report.

The top three suburbs for annual median house price growth are in the local government area of Mornington Peninsula.

The suburb of Rye led the house price growth with a 48 per cent annual increase, bringing the median cost of a home in the seaside suburb to $1,195,000. Mount Martha saw a 34 per cent annual increase taking its median house price up to $1,870,000, while its upcoast neighbour Rosebud grew 32 per cent to $851,121.

However, metropolitan Melbourne still has plenty on offer for different budgets. Units in inner-city suburbs such as Docklands ($555,000) and Melbourne CBD ($580,000) are ranking in the top 20 quarterly growth suburbs while recording median prices under the $600,000 mark.

Houses in Melbourne’s traditionally more affordable suburbs have also reported strong annual growth. The median house price in Werribee grew 18.7 per cent to $620,000, while Sunbury saw a 16.8 per cent spike to $652,500.

The five-year growth streak continues in regional Victoria, with a 26.7 per cent annual increase in the median house price ($595,000) and a 3.8 per cent increase ($625,000) in the last quarter.

“As expected the report shows the metropolitan housing market is stabilising but the fundamentals remain strong,” REIV president Adam Docking said.

While the quarterly data reported a 0.3 per cent drop in metro house prices ($1,121,500) and a 0.9 per cent decrease in Units and Apartments ($684,000), the annual median house price rose 18 per cent from $932,500 to $1.1 million in the past 12 months.

“The Victorian residential market has recorded strong growth for more than two years and as supply catches up with demand, we can expect to see a steadier period,” Mr Docking said.

“The data reflects the theme of ongoing migration to the regions, as we see more Melburnians seeking out a scenery change in coastal towns and regional cities.”

Mr Docking emphasised that despite the stabilisation starting to be seen across Melbourne, governments, both state and federal, need to review some of the fundamentals such as property taxes that form a significant part of the cost to acquire and maintain a property.