Melbourne home values rise faster south of the Yarra in 2014

CoreLogic RP Data Melbourne Property Values report – 2014

The top 10 Melbourne suburbs ranked by growth in house values in 2014 were dominated by some of the cities most expensive suburbs and they were located south of the Yarra.

Overall, the Melbourne housing market produced a near repeat of 2013 with house values rising by 8.4 per cent and units recorded a rise of 1.1 per cent as a result of high levels of supply; particularly in the inner city high rise market.

Armadale, Caulfield North and Kew experienced the highest growth in house values and this is reflective of a number of factors including that the strongest rate of value growth being recorded in the middle and upper segments of the market.

The appearance of Box Hill in the Top 10 highlights the continual popularity of the group of suburbs around Balwyn and Mont Albert. Over the last decade these suburbs have provided the best capital gains for owners. These suburbs have broad appeal for myriad reasons such as close proximity to local amenities such as parks, a range of transport choices, local shopping nodes and accessibility to the central business district.

At a broader level, the fundamentals of the Melbourne property market remain sound. A major contributor to these fundamentals is the positive impact on housing market from supportive monetary policy in the form of a record low interest rate. Furthermore, ongoing strong overseas migration to Victoria and a record high influx of residents moving to the state from the rest of Australia also helps to support housing demand.

House value growth slowed from 3.8% in the September 2014 quarter to just 1.1% over the final quarter of 2014. My big question for the summer and autumn markets is whether this was simply due to higher levels of supply or the start of a softer trend.

About Robert Larocca

Robert Larocca has built a profile over the past eight years as an expert on the Victorian residential property market. He worked for the REIV both directly and as a consultant over 8 years acting as a spokesperson, managing its research department and public policy. He has been a media and government relations consultant and spent a decade working across the three levels of government including as a Councillor and Mayor in the City of Moreland. He has well developed leadership skills in the not for profit sector and has been the Chairperson of CERES Community Environment Park for 9 years.

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