House prices in the average Melbourne suburb are up nearly 50% in the last 3 years. Wow.
Instead of explaining the reasons behind the growth (interest rates, migration, investors, foreigners, etc), we’ve put together a few maps and graphs to effectively describe the growth…
House Prices really started ticking up in 2015. Not everywhere though. We’ve broken down Melbourne’s 400+ suburbs to identify the top 20% performers in each year (e.g. those 80-odd suburbs that experienced the most price growth). As shown below, the top performers in 2015 were concentrated mainly in the Eastern regions of Melbourne. Think suburbs in Boroondara, Manningham, Whitehorse, Monash, and Maroondah – Hawthorn, Doncaster, Box Hill, Mount Waverley, Ringwood East.
Strong growth continued in some of these suburbs in 2016, but the highest rates for the year were predominately seen in Western, Northern and Coastal regions – Sunshine, Strathmore, Fawkner, Northcote, Cheltenham, Seaford.
Finally, last year, solid growth reached Outer Melbourne – Hoppers Crossing, St Albans, Epping, Wonga Park, Hampton Park…
Reading this, you may have already realised that price growth is never uniform across all suburbs at all times.
But, as the saying goes, a rising tide lifts all boats. Significant and sustainable price rises in one suburb, council, or region, inevitably leads to price rises elsewhere; when most buyers get priced out of one area, they don’t simply stop looking altogether, they alter their parameters, and often look elsewhere.
This graph explains a lot about the recent growth cycle in Melbourne House Prices. In 2015, the top performing suburbs were those with the highest median $ house prices. In 2016, growth was spread fairly evenly across all $ price segments. And, in 2017 (at the end of this current growth cycle??), the best performing suburbs were those with relatively modest median $ house prices.
Finally, have a look at this map… Which suburbs haven’t yet kicked on? Understanding past performance plays a major part in formulating a plan for future property investment and development.
