December 2023 Quarter - Melbourne
- Posted By Chris Nicholson
Melbourne’s housing market showed signs of momentum over the December quarter, with house and unit prices both experiencing growth. This upward trend marks a potential recovery period for the city’s real estate market following the downturn of 2022-23.
Melbourne’s house prices rose slightly faster than the previous quarter, achieving the steepest quarterly gain in two years. However, the quarterly pace of growth remains modest at 0.9%, compared to the historical average of 2.7%. While this marks the third consecutive quarter of house price growth, Melbourne's recovery is still in its early stages compared to other cities. Since hitting a low in March 2023, house prices have regained approximately $25,000 of the $72,000 lost during the 2022-23 downturn, representing only about one-third of the recovery needed.
In contrast, Melbourne’s unit prices have shown a more robust recovery, moving through their third consecutive quarter of growth. This period marks the strongest and most sustained growth since late 2019, pushing annual gains to a two-year high. Despite the rise, the pace of quarterly gains has halved compared to the previous quarter, indicating a more sustainable growth rate. Unit prices continue to outperform house prices, narrowing the price gap between the two to a two-year low in percentage terms. The recovery of unit prices is more advanced than that of houses, having regained nearly $42,000 of the $63,000 lost during the downturn, equating to roughly two-thirds of the recovery.
Melbourne's housing market is on a promising path to recovery, with both house and unit prices showing consistent growth. While the house price recovery is still in its infancy, unit prices have made significant strides, suggesting a more established recovery for this segment. The coming months of 2024 will be critical in determining whether this upward momentum will solidify into a sustained market resurgence.