24th April 2020 / Steven Zervas: Melbourne house prices hit record highs on cusp of COVID-19

Melbourne house prices hit record highs on cusp of COVID-19

Brought to you by Realestate.com.au - Jayitri Smiles

Melbourne house prices hit record highs this year, before coronavirus flipped the property market on its head. Impressive price gains led to greater Melbourne's median house price rising 3.7 per cent to $893,000 in the March quarter, Real Estate Institute of Victoria data shows. But state Treasury modelling suggests the progress could be cut short, with property prices predicted to fall by as much as 9 per cent, or about $80,000, during the pandemic.

Melbourne house prices hit record highs before coronavirus.

REIV president Leah Calnan said the March quarterly results were an encouraging sign that the market could quickly recover after shutdown measures ended.

"We know there will be a reduced number of transactions, but that's quite traditional coming into winter months anyway," Ms Calnan said.

"There will be some level of price adjustment, but I'm optimistic that the property market is strong and we'll see huge improvements in spring."

A public auctions ban is in place during the pandemic. Picture: David Crosling

Port Melbourne and Brighton houses showed some of the largest quarterly gains, with median prices up 8.4 per cent to $1.81 million and 10.1 per cent to $2.9 million respectively.

Northcote's median unit sale price also sprung by a whopping 32 per cent to $745,000.

Melbourne's outer ring also hit a new price record, with the house price median up 2.7 per cent to $695,500.

Peake Real Estate agent Andrew Brown said Melbourne's outer southeastern suburbs had enormous buyer activity in January and February.

Pakenham was a top performing suburb, where 57 Manna Gum Drive is for sale.

"Numbers have heavily reduced and our agents are coming in contact with a lot less prospective buyers due to the ban on inspections," Mr Brown said.

"While there may be a decline in median prices to come, I think the underlying factors are still very good.

"Once there's a bit of normality back and some more job security, I expect we'll bounce back quite well."

Property Mavens director and vendors' advocate Miriam Sandkuhler said buyers and sellers were "holding their breath" during the COVID-19 storm, which was leading to price drops.

She said the top end of the market could see price adjustments of up to 10 per cent during the shutdown.

"Anything under $1.5 million is still attracting attention from genuine, qualified buyers," Ms Sandkuhler said.

"First-home buyers are still looking to purchase if they're in a position with job security, but downsizers who don't have to sell are definitely happy to sit and wait it out."