Melbourne, long known for its robust property market, is experiencing a slowdown in home value growth while other cities like Brisbane continue to surge ahead, PropTrack reported.
For the first time in 14 years, Brisbane’s median home value has surpassed Melbourne’s, reaching $951,000 compared to Melbourne's $912,000.
PropTrack’s realEstimate valuation model revealed Brisbane’s median house values grew by 4.4% during the quarter, while Melbourne’s only increased by 0.1%.
Units in Brisbane saw a 7.4% growth, whereas Melbourne experienced a decline of -0.1%.
“Melbourne has long been one of Australia's strongest property markets alongside Sydney, thanks to its robust job market, high migration from overseas and interstate, and its reputation as one of the world's most livable cities,” said Karen Dellow (pictured above), senior audience analyst at PropTrack.
The pandemic hit Melbourne harder than other cities, resulting in significant interstate migration and a loss of investors due to low rental demand.
“Melbourne lost more of its population to interstate migration and faced closed borders, which led to many investors leaving the market due to low demand for rental properties in the inner city,” Dellow said.
As of June 2024, Melbourne’s prices were 3.89% lower than their previous peak before the downturn. In contrast, cities like Sydney, Brisbane, Adelaide, and Perth had already surpassed their previous highs.
According to a Residential Audience Pulse survey by realestate.com.au, only 19% of Victorian respondents considered it a good time to sell, compared to higher percentages in Queensland and New South Wales.
Higher interest rates and a higher cost of living have reduced borrowing power, making buyers more cautious.
June sales figures in Melbourne were up 16% compared to last year, but more than one-third of properties sold for less than the asking price. In contrast, over half of the sales in Brisbane and Adelaide went for more than the asking price, and in Perth, 77% exceeded the asking price.
Despite slower growth, Melbourne’s property market remains active.
“It is more likely that Melbourne is simply undergoing a period of adjustment, with prices normalising after decades of strong growth,” Dellow said.
Buyers and sellers continue to participate in the market, indicating a period of normalisation rather than decline, PropTrack reported.
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