- November 28th, 2024
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read moreFor the first time ever, Melbourne’s median dwelling value has fallen below that of Perth, Brisbane, and Adelaide, according to the most recent CoreLogic data. This surprising development comes as Melbourne is on track to overtake Sydney as Australia’s most populous capital city, marking a significant shift in the real estate landscape.
Just a few years ago, Melbourne stood well ahead of every other Australian capital except Sydney, which still leads the pack with a median dwelling value 35% higher than Brisbane, the second-highest city. However, the pandemic years have seen Australia’s housing prices surge by an average of 47.9% nationally, driven largely by strong growth in Perth, Adelaide, and Brisbane. While Melbourne and Sydney have also experienced price increases, their growth has been notably slower.
The Median vs. Average Price: Understanding the Difference
It’s essential to note that CoreLogic’s data reflects the median dwelling price, which can be skewed by the types and numbers of dwellings sold. Melbourne’s drop in median price doesn’t necessarily mean that property values are lower across the board. In fact, when you look at houses and units separately, Melbourne still comes out ahead of Perth and Adelaide. The difference lies in the makeup of Melbourne’s housing market—about 33% of dwellings in the city are multi-unit buildings, compared to only 16% in both Perth and Adelaide.
What’s Driving the Shift?
Several factors have contributed to Melbourne’s lower median dwelling value. One of the key drivers is net-interstate migration, which remains negative for Victoria—a lingering effect of the state’s stringent COVID-19 restrictions. Western Australia, Queensland, and South Australia, on the other hand, have benefited from this exodus, with positive interstate migration bolstering demand in those markets.
Victoria has also experienced fewer supply constraints than other states. Melbourne has had significantly more dwelling completions in recent years, which has helped to keep supply relatively stable compared to the increased demand in states like Queensland and Western Australia.
Why Melbourne Still Holds Long-Term Promise
Despite this temporary dip in the rankings, Melbourne’s future as Australia’s largest capital city presents an enticing opportunity for investors. With booming prices in other cities, it’s easy to be lured by the prospect of continued price rises elsewhere. However, smart investors know that the old adage “buy low, sell high” remains true, and Melbourne’s current comparatively sluggish growth could be the perfect chance to secure prime real estate with amazing growth potential at a lower cost.
The Property Mentors continue to believe in Melbourne’s long-term investment potential. While we purchase properties with our members nationally, Melbourne’s unique position and future growth make it a standout option for those looking to maximise their investment returns.
Take Action Today
If you’re considering property investment, now is the time to discuss your strategy and secure some of Australia’s greatest investment opportunities. Book a call with a property mentor to start your journey and learn how to make the most of this exciting market shift.
