June 2024 Quarter - Melbourne

Posted By Chris Nicholson

In recent months, the Melbourne property market has shown notable shifts, reflecting both recovery and divergence in housing and unit prices. The latest quarterly data reveals a significant rebound in house prices, marking the strongest growth in 2.5 years. This positive trend contrasts with a decline in unit prices, which has reached its steepest point since early 2023. These developments signal a dynamic shift in the Melbourne real estate landscape, influencing affordability and the comparative value between houses and units.

For the fifth consecutive quarter Melbourne’s house prices have grown, rising by almost $18,000 (or 1.7%). This quarter marks the strongest gain in 2.5 years, matching the total growth seen over the previous three quarters combined. House prices have rebounded by over $44,000 (or 4.3%) from the $69,000 (or -6.3%) decline experienced during the 2022-23 downturn. Although the recovery has been gradual and is now as long as the downturn (five quarters), it seems to be gaining momentum. Notably, this is the first time in nearly four years that Melbourne has recorded stronger positive quarterly growth compared to Sydney.

On the other hand, Melbourne unit prices dropped for the second consecutive quarter, decreasing by nearly $9,500 (or -1.7%)—the sharpest quarterly decline since March 2023—after three quarters of positive growth. For the first time in 15 years, Melbourne units are now more affordable than those in Brisbane, as prices in the two cities diverge. Currently, unit prices are almost $47,000 (or -7.8%) below their December 2021 peak. With house and unit prices moving in opposite directions, the gap between property types has widened, with houses now costing 92% more than units—a record high for Melbourne.

As Melbourne's property market continues to evolve, the contrast between the recovery in house prices and the ongoing decline in unit values highlights a significant shift in the city's real estate dynamics. With houses gaining momentum and unit prices falling to new lows, the gap between property types has widened to unprecedented levels. This evolving market scenario underscores the complexities of the current housing landscape, offering new opportunities and challenges for buyers, investors, and industry observers.