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New figures from the REIV showed that in the June quarter, the median house price in regional Victoria outstripped that of Melbourne.
Median house prices in the regions rose by 4.0 per cent to $419,500, but in Melbourne they dipped by 0.6 of a percentage point to $840,000.
The result in Melbourne was due to a 0.8 of a percentage point fall in prices achieved at auction, and this was despite a lift of 2.3 per cent in private sales.
Inner Melbourne suffered due to auction prices, where median prices fell by 4.9 per cent to $1,459,000. But it was middle Melbourne that was the hardest hit, with a 5.4 per cent drop to $974,500.
Outer Melbourne had a good quarter, with the median rising by 0.5 of a percentage point to $681,000.
Apartment prices in regional Victoria grew by 3.7 per cent to $304,500 while the metro media was up by 0.5 of a percentage point to $604,000.
REIV president Richard Simpson said that despite fewer sales, many sectors of the market were performing well.
“2017 was a bumper year and while the trendline has flattened, despite the fall in median house prices in the June quarter, median prices are still up this calendar year for both houses and units in Melbourne and in the regions,” Mr Simpson said.
In particular, there has been strong growth in regional centres, which was probably due to concessions for first home buyers, according to Mr Simpson.
“The first home buyers’ concession has been a boon for regional areas. A new entrant to the property market buying a house at the regional median will pay no stamp duty, while a first home buyer of an apartment in Melbourne at the median price would pay stamp duty of nearly $25,000,” the REIV president said.
Mr Simpson added that more prospective buyers are looking towards regional Victoria, which is also having an effect in Melbourne.
“Melbourne’s outer perimetre continues to grow. Small increases in the June quarter mean that the median prices for both houses and units have risen over 10.5 per cent from a year ago.”
Mr Simpson said that moving forward, vendors need more realistic expectations as the highs of 2017 are now over.
“Negative chatter about the future of the sector, coupled with stronger lending controls by financial institutions, has created some uncertainty and vendors need to be realistic with their price expectations,” Mr Simpson said.
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