Melbourne property prices jumped 1.5 per cent in the June quarter to set a new median house price record.
Melbourne’s median house price is now $740,995 and the city has recorded the highest annual growth rate of all capital cities at 7.4 per cent.
The figures aren’t making things any easier for house hunters and first-home buyers after recent figures showing a sharp fall in home ownership in Australia.
The proportion of household owner-occupiers has dropped significantly in Australia since 2001.
In terms of Melbourne’s house price growth, the western and northern suburbs are starting to emerge after a prolonged period of success in the eastern suburbs.
On the weekend, the northern suburbs recorded a massive 96.7 per cent auction clearance rate, giving a clear indication of rising demand in the area.
Things were solid across the whole of Melbourne, with an auction clearance rate of 80 per cent on the weekend, the best result of the year so far.
Domain Group’s chief economist Andrew Wilson told The Age that possible imminent changes to negative gearing may be behind some of the increased activity.
“Even if we get another interest rate cut or maybe two, which is a possibility this year, I don’t think we’ll get the type of quarterly growth rates that we had at the peak of the market last year,” he said.
Shane Oliver from AMP also spoke to The Age to give his thoughts on the market.
“Interest rates are so low that investors are still looking for a decent place to park their money given volatility in other markets like shares,” he said.
“Prices are probably going to keep growing, but I suspect that the pace might continue to slow.”
Jellis Craig chief executive said the inner-north of Melbourne had become one of the city’s most attractive spots.
“A lot of the generations coming through aspire to live in the inner-north now; the likes of Fitzroy, Brunswick and Northcote, as opposed to the default aspiration being inner-east or inner south-east,” he told The Age.
“The rate of price growth has come off in the last quarter in the eastern suburbs a little bit due to a small reduction in appetite from offshore investors.”