Victorian house prices are rising at record levels as the real estate market surges out of lockdown.
According to the Real Estate Institute of Victoria, house values in metropolitan Melbourne rose by 9.5 per cent in the quarter to round out 2020, the greatest quarterly increase since 2000.
In another sign of confidence in the market, the rise means Melbourne house prices pushed past a median value of $900,000 for the first time – ending the December quarter at $941,000.
Commenting on the price rise in their quarterly December report, the REIV said that after spending more time than ever at home during the pandemic, Victorian families have taken the opportunity to upgrade their home as they emerged from a lengthy lockdown.
Municipalities throughout Melbourne’s north west and Macedon Ranges corridor have enjoyed significant price growth.
- In Moonee Valley, house prices grew 11.1 per cent in the December quarter for a yearly rise of 10.3 per cent and a median value of $1.175 million
- In Hume, house prices rose 6.2 per cent in the December quarter for 6 per cent yearly growth and a median value of $608,750
- In Moreland, prices rose by 9.4 per cent in the December quarter and 11.9 per cent for the year to a median of $1,022,500
- In Macedon Ranges, prices rose by 3.2 per cent in the December quarter and 9.2 per cent for the year to a median of $815,000
“Throughout the July and September quarters, we received constant reports of low listings and activity,” REIV President Leah Calnan
“Once restrictions across the state eased, demand and buyer competition skyrocketed.”
“Certainly low interest rates and government incentives including stamp duty concessions and first home buyers grants added to buyer appetite for the December quarter, while volatility and uncertainty in the Australian equity market have secured property as a preferred investment option for Victorians”.
Median Melbourne house prices, borrowing levels and auction clearance rates are all rising strongly.
Aussies borrowing in record numbers
The record rise in Melbourne house prices comes as borrowing in Australia reaches new levels.
According to the Australian Bureau of Statistics: the total value of new loan commitments for housing and the value of owner-occupier home loan commitments both reached record highs in November 2020.
The value of new owner-occupier home loan commitments rose 5.5 per cent to $18.3 billion in November 2020, that is 31.4 per cent higher than a year earlier.
The ABS said: “Victorian owner occupier home loan commitments rose sharply, up 19.6 per cent in seasonally adjusted terms in November, reflecting a surge in housing market activity as COVID-19 restrictions were eased.
Federal and state government incentives and low interest rates contributed to the record rise in loans, the ABS stated.
Melbourne leads auction boost
Auction volumes rose 44 per cent over the December quarter, according to respected property data provider Core Logic, with much of the boost due to activity in Victoria.
The combined capital city clearance rate was 69.4 per cent over the December quarter, meaning it was the best performing quarter of 2020, followed by the March 2020 quarter at 62.5 per cent.
“65.2% of the uplift can be attributed to the resurgence of auctions scheduled across Melbourne,” CoreLogic’s Head of Research Australia, Eliza Owen said.
“Vendor activity became pent up during stage four restrictions across the city, leading to a delayed flurry of activity.
“As restrictions eased we saw new listings soar across Melbourne with people looking to sell, and last year the seasonal drop off in auction activity happened about a week later than we would typically expect, as agents tried to keep up with vendor demand.”