THE crà¨me de la crà¨me of Melbourne's residential property market has collapsed. Suburbs like Toorak and Kooyong have seen prices fall by much as 24%, according to the Australian Property Institute.
API Victorian president Chris Plant said the figures sourced from Prism Data shows three municipalities had median house prices of over $1 million in 2007, but in 2008 no Melbourne municipalities eclipsed the $1 million mark.
Melbourne’s most expensive municipality remained Bayside which includes suburbs such as Brighton fell from its median high of $1.085 million in 2007 to $935,000, representing a decline of 13.8%.
Meanwhile the Stonnington area which encompasses Prahran, Windsor, South Yarra, Toorak, Armadale, Malvern, Malvern East, Glen Iris and Kooyong, the average price fell from $1.047 million to $800,000 – a decline of about 24%.
And in Booroondara, otherwise known as Melbourne’s inner eastern suburbs (Balwyn, North Balwyn, Camberwelll, Canterbury, Hawthorn, Hawthorn East, Kew, Kew East, and parts of Glen Iris, Surrey Hills and Mont Albert), the median house price dived 18.6% from $1.13 million to $920,000 in 2008.
“The figures are alarming for anyone who thought they had a million dollar property. The top end of Melbourne’s housing market is definitely off the boil,” he added.
The data shows that the median price in the Melbourne municipal area fell from $656,000 to $502,000 – a $154,000 fall. This area is dominated by apartments and townhouse developments.
The municipalities of Melbourne (CBD, Docklands, Southbank, Carlton, Parkville, and North Melbourne) and Stonnington recorded falls of 23.5% and 23.6% in the fourth quarter of 2008 compared to the fourth quarter of 2007.
Other areas to record significant downturns over the past 12 months included Glen Eira (Bentleigh, Bentleigh East, Carnegie, Caulfield, Caulfield South, Caulfield North, Caulfield East, Elsternwick, Gardenvale, Glenhuntly, McKinnon, Murrumbeena, Ormond, and part of St Kilda East.) with median prices falling just over 20%.
Plant said despite the fewer number of properties offered for sale the significant drop in property values in the 12 months to 31 December last year, the fall in median prices across the Melbourne municipalities was dramatic.
“No doubt it is the largest fall in median house and apartment price decline for almost a decade, but the worst of the fall appears to be behind us, with encouraging auction clearance rates last weekend,”
Source: API; Prism Data
Plant pointed to the continued fall in interest rates as an influence in halting house price decline.
A mere three municipalities showed growth in the past 12 months, Brimbank (+8.8%) encompassing such suburbs as Sunshine, St Albans, Keilor and Sydenham; Greater Dandenong (2.2%) – Dandenong, Keysborough, Noble Park and Springvale; and Hume (7.6%) – Broadmeadows, Sunbury and Craigieburn.
Plant noted that in each of these areas of median price growth are new home buyer communities and areas of significant new home development in recent years.
Melbourne’s cheapest homes could be found in Wyndham (-6.6%) which encompasses Point Cook, Werribee, Hoppers Crossing, Tarneit and Wyndham Vale. The median house price in Wyndham municipality fell to just $261,000.
Australian Property Journal
