After several years of unprecedented growth, we are now heading into a more balanced market. This will result in more predictability for both buyers and sellers and provide a better opportunity for first-home buyers.
March quarter figures released by the Real Estate Institute of Victoria (REIV) show Melbourne’s median house price down from $1,125,000 to $1,120,000 representing a -0.3% drop. Melbourne’s median unit price is also down from $691,000 to $684,000, a 0.9% drop. In Banyule, the median house price for the March quarter is $1,177,500 and $723,000 for units.
Clearance rates paint an interesting picture. Melbourne’s March quarter average was 78.5%, however, Heidelberg and Heidelberg Heights both smashed through with a clearance rate of 92.9% and 93.8% respectively. Heidelberg Heights was one of the top 10 highest clearing suburbs and, interestingly, Heidelberg was named Melbourne’s second most liveable suburb by PwC and ‘Future Victoria’ in November 2021.
Median prices in some of our key suburbs are down slightly, whilst others have achieved small rises.
- Ivanhoe is down a little at $1,990,000 representing a -5.2% drop
- Ivanhoe East is up slightly at $2,450,000 representing a small gain of 0.6%
- Eaglemont is down -2.4% at $2,520,000
- Heidelberg is up 2% at $1,600,000
- Viewbank has experienced growth at 2.4% with a median house price of $1,280,000
Notable sales
A beautifully renovated and contemporary-styled Californian Bungalow at 80 Ivanhoe Parade, Ivanhoe attracted 98 buyer leads and achieving a very strong result of $4976 p/sqm.
A mid-century home at 11 Eugene Street, Viewbank sold for $1,400,000 with 80 interested parties and three bidders at auction.
A well-presented home at 24 Forster Street, Ivanhoe sold for $1,120,000 with 100+ buyer leads demonstrating the popularity of a low maintenance opportunity in a very convenient location.
Demand to soar for renovated homes
With the increases in the cost of construction up by more than 20% due to an overall shortage of materials and the high demand for tradespeople, homeowners and buyers wanting to renovate or rebuild are now considering other options. In an effort to avoid the increased costs and delays in construction, they are taking the alternative step of searching for fully renovated properties to purchase, this is an attractive solution and has increased the demand for renovated homes currently on the market.
Interest rates rising
There is a lot of talk about interest rates and the effect of rising rates on the property market. The current RBA cash rate is sitting at 1.35% and when passed on by a bank results in home loan interest rates of between high 2% to 4% depending on the loan-to-value ratio. Before 2008’s global financial crisis, the cash rate was 7.25%
- In November 2000 it was 6.25%
- In November 2005 it was 5.5%
- In November 2010 it was 4.75%
- In December 2015 it was 2.0%
- In November 2020 it was 0.10%
- In June 2022 it was 0.85%
- In July 2022 it is 1.35%
Historically, interest rates are still low and even with multiple short-term rises predicted in an effort to control inflation, the cash-rate is expected to remain in the normal range.
So, whilst the property market is currently more price sensitive there are still a number of solid results being achieved with well-priced and well-presented properties continuing to attract good buyer interest.
The Miles team is always available to provide further insights and advice about the local real estate market. If you have any queries, or are considering your options, please don’t hesitate to get in touch.
