The Melbourne median house price for the March quarter is $565,000, according to the latest results from the REIV. This represents a six per cent reduction from the revised December quarter median of $601,000.
REIV CEO Enzo Raimondo said, “it is evident that the current residential market in Melbourne and Victoria has entered into a different phase of lower transaction numbers and reduced price growth. This is due mainly to affordability constraints, affected by the seven rate rises since December 2009 and particularly following the November interest rate increase. It must also be noted that most years the median price does reduce in the March quarter due to the lower activity in January.
“These results show that prices in most suburbs in Melbourne have plateaued and this will be welcome news for buyers looking to buy this year.
“Melbourne remains the second-least-affordable city in which to buy a home and buyers are being more cautious, as highlighted by the overall number of transactions falling by 18 per cent compared to this quarter last year. There are also about 37 per cent fewer first home buyers active in the market than this time last year.
“Suburbs that have experienced good capital growth over the year have been recorded predominantly in affordable suburbs in the south east in Langwarrin, Mount Martha and Mornington; in the west in Footscray, Caroline Springs and Werribee; and also in Malvern East and Kew.
“For the medium term the residential market has entered into a period of lower transaction numbers and lower price growth, and we are not going to see a repeat of the 20 per cent increase seen in 2010. The key to how the market performs in 2011 and beyond will depend on the strength of the local economy; at this stage, the fundamentals are still strong, especially population growth, employment and consumer confidence.
“The median price of a unit or apartment was more stable, with a 4.2 per cent drop in the quarter from $480,000 to $460,000. Melbourne also has recorded its first suburb with a median price of a unit or apartment over a million in Brighton, where it reached $1,060,500.
“In regional Victoria the median house price was stable at $320,000. Demand mirrored the metropolitan area over the year, with an 8.5 per cent increase compared to 8.7 per cent for Melbourne.
“Each of the three main regional centres recorded strong demand The median price of a house in Geelong dropped by 1.3 per cent to $385,000, in Bendigo it increased by 1.8 per cent to $280,000 and in Ballarat it remained stable at $284,900,” Mr Raimondo concluded.