Melbourne’s house and unit prices are closing the gap on Sydney and are the closest they’ve been for four years.
In the March quarter this year the Harbour City’s house prices fell 2.6 per cent and their median price now sits at $1.15 million.
In Melbourne prices rose by 0.1 per cent to hit a median of $914,518, which is the 22nd consecutive quarter of price growth for our city, making the difference between Australia’s two biggest property markets around $200,000.
Domain’s Dr Nicola Powell spoke to Property Observer about the house price trends in the two cities.
“Following marginal quarterly growth in December, house and unit prices in Sydney continued to soften over the March quarter, a trend first identified in September 2017,” she said.
“Although both house and unit values declined, units softened moderately compared to house prices in March, demonstrating the impact of the affordability hurdles of purchasing a home in the Harbour City.”
“New South Wales is experiencing an increase in first home buyer activity, which is being driven by government incentives.”
“The increased demand at the entry-level price point may support price increases at the lower end of the market.”
In Melbourne, unit prices jumped by 0.7 per cent for the quarter – the only major city to record a unit price growth for the March quarter.
“While Sydney is currently dealing with the impacts of decreased investor activity, Melbourne has always been an owner-occupier led market, and is somewhat less exposed to investor movements relative to Sydney,” Powell told Property Observer.
“Ongoing price growth in the Victorian capital is being supported by the city’s rising population, strong employment growth and lower affordability hurdles.”
“Although there are certain pockets of Melbourne impacted by heightened unit supply, overall the city delivered the strongest annual growth in eight years.”