December 2022 Quarter - Melbourne

Posted By David Brown

The housing market in Melbourne, Australia, has been a topic of much interest and discussion in recent years, with fluctuating prices and shifts in demand from buyers and renters alike. As of 2022, the market has stabilized somewhat after a period of decline, with house and unit prices showing signs of leveling off. Nonetheless, prices remain below peak levels seen in 2021, and the ongoing effects of the COVID-19 pandemic continue to impact the market in various ways. This complex landscape presents challenges and opportunities for buyers, sellers, and investors navigating the Melbourne housing market in the year ahead.

The housing market in Melbourne has shown signs of stabilizing after a period of decline. House prices increased slightly in the December quarter, recouping a sixth of the record decline seen in the previous quarter. However, despite this improvement, house prices still experienced their sharpest annual decline in three-and-a-half years and are currently 5.6% below the peak seen in December 2021, equivalent to a decrease of around $61,000. Nonetheless, house prices are 17.2% higher than pre-pandemic levels.

Domain House Price Report - December 2022 | Domain

Unit prices also stabilized in the December quarter, experiencing only a slight decrease. Nevertheless, unit prices are still 5.8% below the December 2021 peak, amounting to a decrease of approximately $35,000. This represents the largest annual decline ever seen in the city's history, with prices now only $6,000 higher than those observed in March 2020. Despite this, unit prices had previously underperformed compared to house prices, with a modest increase of 8.9% during the upswing, compared to a 24.1% increase for house prices, meaning they did not need to fall as far to adjust.

In conclusion, the Melbourne housing market in 2022 is showing signs of stabilization after a period of decline. While house and unit prices have increased slightly over the December quarter, they remain below peak levels seen in 2021. The ongoing effects of the COVID-19 pandemic continue to impact the market, with shifting demand and supply patterns, changes in buyer preferences, and economic uncertainty. However, despite these challenges, the market presents opportunities for buyers, sellers, and investors who are able to navigate the complex landscape and stay attuned to evolving trends and developments. As such, the Melbourne housing market in 2022 remains a dynamic and important sector of the Australian economy, with implications for individuals, communities, and the broader society.