In a stunning reversal of fortune that has defied soaring interest rates and a national cost-of-living crisis, Melbourne's property market has exploded back to life, notching up its most powerful quarterly growth in well over a decade.
Exclusive data from leading property analytics firm CoreLogic reveals a city in the midst of a remarkable resurgence. Melbourne house prices surged by an impressive 2.3% in the September quarter alone, marking the most robust three-month period of growth the city has witnessed since March 2010.
The Suburbs Leading the Charge
The recovery is not uniform, with a clear divide emerging between the city's inner and outer rings. The data paints a picture of a two-speed market, where affluent, inner-city suburbs are powering the comeback.
Melbourne's top-performing suburbs for quarterly growth include:
- Kew East: Leading the pack with a staggering 6.6% surge.
- Blackburn: Close behind with a solid 5.8% increase.
- Glen Iris & Canterbury: Both recording strong growth of 5.1%.
This trend underscores a significant shift in buyer priorities, with a renewed focus on established homes in desirable locations close to the CBD, amenities, and top-tier schools.
Why is Melbourne Booming Against the Odds?
Experts point to a potent cocktail of factors driving this unexpected boom. A critical shortage of available properties for sale is creating fierce competition among buyers. This is compounded by a surge in population growth, both from overseas migration and a 'race for space' as flexible working arrangements become permanent for many.
Furthermore, a resilient economy and a tight rental market, where soaring rents make mortgage repayments appear more comparable, are pushing more Australians towards ownership.
A Market of Contrasts
While the inner ring thrives, the story in Melbourne's outer suburbs and new housing estates is markedly different. Areas like Melton and Casey are still feeling the pinch, with values struggling to keep pace. This highlights the nuanced nature of the current recovery, which is being led by established, higher-value stock rather than new builds.
Tim Lawless, Research Director at CoreLogic, notes, "We are seeing a definite flight to quality. Buyers are prioritising location and existing housing stock, which is insulating these markets from the broader economic headwinds."
With auction clearance rates remaining strong and buyer demand significantly outstripping supply, all indicators suggest that Melbourne's property renaissance is built on solid foundations and has considerable room to run.
