Melbourne house and unit values fall for two consecutive months

Melbourne housing market blogThe key differences between the past two property cycles and the current one has become much clearer following Monday’s release of the RP Data-Rismark Home Value Indices results for May.

The May results showed that the value of a house dropped by 3.6 per cent in May resulting in a rise of only 1.6 per cent over 2014. Unit values also fell by 2.6 per cent over the year following; a drop of 3.4 per cent in the month.

After a new nominal peak in Melbourne house values was reached in March, there has been two consecutive months in which values have fallen ensuring buyers in winter and early spring wont face rapid price rises. In fact, they are likely to see houses valued lower than they were in real terms in 2010. This result should also eliminate any concerns that the local market was locked into a cycle of unstainable growth in prices.

This upswing phase in house values started in May two years ago and is clearly more moderate than the 2007 and 2010 cycles due to better alignment between supply and population growth along with the fact that consumers remain cautious. Over the past two years, house values in Melbourne have risen by 13.1 per cent  and are now only 0.7 per cent higher than the October 2010 peak.

Robert Larocca
RP Data Victoria Housing Market Specialist

About Robert Larocca

Robert Larocca has built a profile over the past eight years as an expert on the Victorian residential property market. He worked for the REIV both directly and as a consultant over 8 years acting as a spokesperson, managing its research department and public policy. He has been a media and government relations consultant and spent a decade working across the three levels of government including as a Councillor and Mayor in the City of Moreland. He has well developed leadership skills in the not for profit sector and has been the Chairperson of CERES Community Environment Park for 9 years.

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