Melbourne housing market remains solid in latest quarter; rate cut to underpin growth
The Reserve Bank today reduced the cash rate by 25 basis points to 2.25 per cent, the lowest level since the 1950’s. Interest rates had been on hold for the past 17 months which provided a solid platform for the property market across Melbourne and Victoria.
The national rate of inflation is currently at 1.7 per cent – well below the RBA inflation target of 2-3 per cent – which indicates an accommodative environment for continued low interest rates.
Melbourne’s housing market remained solid in the final quarter of last year, with the city’s median house price of $669,000 up five per cent on the September quarter. Prices increased in inner, middle and outer suburbs.
Supportive information source: REIV Monthly Research Bulletin – published February 2015
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Posted by: Mark
In 2014 this low interest rate level enabled the market to withstand the
impact of moderating consumer confidence and to grow at a consistent
The auction market experienced a strong last quarter in 2014, with two
record auction weekends and approximately 41 per cent more auctions
compared to the September Quarter 2014. There were over 13,400
auctions held over the quarter and around 3,500 auctions held during
the month of December 2014. More than 40,000 auctions were held in
2014, well ahead of 2013 when 35,000 auctions were held.
The average clearance rate in December 2014 was 67 per cent, which
is the same level as a year earlier. While the clearance rate fell slightly
in the final two months of 2014, it is still a solid result given the high
number of auctions in November and December.
Median house prices in Metro Melbourne grew 5.3 per cent over the
December Quarter 2014, which was reflected in the overall increase
of the HPI over the quarter. The REIV House Price Index (HPI) for
Melbourne increased by 0.8 per cent to 170.1 from 168.8 in December
2014. Owing to the record auction weekends in October and November,
the index increased significantly over the December Quarter. The REIV
Unit Price Index (UPI) for Melbourne also rose by 0.4 per cent in January
2015 to 151.8. The HPI for Regional Victoria decreased 0.4 per cent in
January 2015, for the first time in six months.
The REIV Property Market Sentiment Index (PMSI) fell by 2.7 per cent
over January 2015, having increased sharply over the previous month.
This was a result of dampened sentiment for sales volumes and listings.
On the other hand, consumer sentiment in Victoria has improved
slightly by 0.7 per cent during the month, however, it continues to track
The vacancy rate in Melbourne tightened to 3.1 per cent over January
2015 from 3.2 per cent in the previous month. Vacancy rates in the
inner suburbs decreased the most, falling to 3.1 per cent from 3.3 per
cent in December 2014.
The REIV House
Price Index (HPI) for
by 0.8 per cent to
170.1 in January 2014.
The index is currently
12.0 per cent higher
than its value a year
The average clearance
rate in December
2014 was 67 per cent,
which is at the same
level as December
This is still a strong
result for the auction
market given the high
number of auctions
held in the month.
The auction market
remained strong in
December 2014 with
over 3,500 auctions
held, closing a big
year for auctions in
Days on Market
The median number
of days on market
for private sales
increased to 41 days
in January 2014, after
being stable at 39
days in December
The vacancy rate in
to 3.1 per cent over
January 2015 from
3.2 per cent in the
Over the same period,
vacancy rates in
remained stable at 2.2
The REIV Property
Index (PMSI) fell by
2.7 per cent over
January 2015, having
over the previous
month. This was
mainly a result of
on new listings,
which corrected after
a sharp increase in