Melbourne home values return to record high

Melbourne property values have officially made a full recovery from the downturn, returning to their previous record high.

House and unit values have shot up 10.7 per cent in the past 12 months to hit a median of $689,088, CoreLogic’s February Hedonic Home Value Index shows.

A 1.2 per cent rise in the past month alone pushed the city back to the benchmark set in September 2017, before the downturn hit the city’s market from late-2017 to mid-2019.

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CoreLogic head of research Tim Lawless previously told the Herald Sun the return to a record high would be “great news for homeowners”.

“But for those trying to get a foot in the housing market, it does mean affordability constraints will become greater,” Mr Lawless said.

Richmond family at auction

Auction clearance rates have also been strong. Picture: Andrew Henshaw

While the market was moving from strength to strength, the analyst suggested it could be an unpredictable year.

“A more significant downturn in consumer sentiment related to the coronavirus outbreak could become a determining factor that impacts the market over the coming months,” he said.

“Consumer sentiment readings are already low, and a further deterioration could see housing market activity start to slow.”

But if the market continued to steam ahead at the same rate of growth, Mr Lawless predicted the country could reach an overall new peak is about two months.

Melbourne home values will hit record heights if there is another monthly increase in March.

The return to the peak comes as a strong 79 per cent clearance rate was recorded from 997 results in Victoria last week by realestate.com.au.

Advantage Property Consulting director Frank Valentic said many of the results seen under the hammer were better than “the last property peak in 2017”.

7/59 Ormond Road, Elwood sold.

The buyer’s advocate saw “aggressive bidders” vie for an Elwood apartment at 7/59 Ormond Rd, which sold for $642,400. It previously sold for $630,000 in July 2017.

Premium markets including Melbourne’s blue-chip regions were leading the charge, with values shooting up 18.3 per cent in the inner east, and also 13.7 per cent in the inner region and 12.9 per cent in the inner south across 12 months.

It sold for more than it did in July 2017.

The apartment sold for $642,400.

Meanwhile, NAB’s latest Australian Residential Property Survey tipped 7.4 per cent rises for Melbourne houses and units in 2020.

If this was to eventuate, it would be the biggest annual increase experienced in the city’s residential market since 2017.

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