Melbourne house prices avoided the doom and gloom of predicted massive drops during the COVID-19 pandemic, with prices staying flat. As restrictions ease across Victoria many expect that we’ll see growth in the real estate market going forward.
Bans on inspections and public auctions were the key factor in property prices stagnating. Media House prices are still 1.6% better than this time last year. Median apartment prices have only dropped 0.1%.
With easing restrictions meaning that property inspections and public auctions are again allowed, it’s expected that we will see a bounce in prices across Melbourne. The fact that there were no drops across the pandemic lockdowns shows that the demand for quality real estate is still there and most industry experts expect significant activity across the summer months driving prices up again as we come out of lockdown.
Despite a lack of activity across the board, there were some high performing areas during the lockdowns that experienced significant growth. The median house price grew by 1.2% across inner city suburbs. Apartment prices in the inner west saw significant growth with median apartment prices increasing by 10.2% in some inner western suburbs.
Incentives available to first home buyers and builders accounts for a significant proportion of market strength. Further, many inner city Melbourne residents looking for a sea change have prompted growth in some outer metropolitan areas. The Mornington Peninsula experienced strong growth. House prices are up 7.8% on last year with 1.9% growth over the last quarter. Unit prices grw 7.8% in the last quarter.
Those areas that were struggling prior to the pandemic saw recent drops continue. Over the September quarter, prices across Melbourne’s outer east dropped, with apartment prices dropping a significant 6.9%. Many industry insiders are confident that we could see a quick rebound in pricing as listings grow and confidence appears up across metropolitan Melbourne.
Agents are hoping for a strong wave of activity and growth as Melbourne comes out of lockdown. The easing of restrictions and a growing economy mean many are more comfortable to spend. It is expected that there will be no real Auction holiday with activity through to late December and then starting again in early January.
Some in the industry are concerned that there may be a wave of sales as eviction moratoriums and jobkeeper supplements end. They are worried that tenants unable to pay rent could lead to financial pressures on investors. However, this could be tempered by millennials looking to get into their own home – seeking freedom after an extended period of time in lockdown with their parents.