REA PropTrack Home Price Index: Melbourne’s red hot housing market shows first signs of cooling

Melbourne’s roaring property market is cooling as new data reveals that price growth stalled in March after a frenzied year of buying.

Melbourne’s roaring property market is cooling as new data reveals that price growth stalled in March after a frenzied year of buying.

But the market in country Victoria continues to steam ahead, with house price growth in the regions among the best in the country.

According to realestate.com.au’s new PropTrack Home Price Index, released today, houses in Melbourne recorded just a 0.01 per cent price growth in the month of March.

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Units saw a 0.22 per cent drop in that same period. while the overall dwelling value dipped slightly by 0.02 per cent.

PropTrack economist and report author Paul Ryan said the slowdown was likely a reflection of the “big uncertainty” around interest rate hikes.

“I would attribute most of that to people thinking interest rates will increase in the next year,” Mr Ryan said.

“Buyers are already incorporating higher borrowing costs into what they’re bidding. (And even though) price growth has slowed across the country, that slow has been more precipitous in Melbourne than elsewhere.”

Wakelin Property Advisory director Jarrod McCabe said buyers were beginning to “sit out a little”.

“It’s certainly becoming far more balanced than what it has been,” Mr McCabe said.

“The clearance rate is holding up well but I think it’s a bit deceptive because we’re starting to see one or two bidders, as opposed to three or four and properties passing in and selling after.”

He said the shift was needed after “two years of strong growth”.

Houses in regional Victoria performed the best, recording a 0.34 per cent jump in the last month amid a continued trend for properties in sea or tree-change areas.

Mr Ryan noted regional areas “continue to outperform capital cities” with buyers seeking out lifestyle properties and homes with backyards.

“We think regional areas will continue to benefit from those trends,” he said.

The report found Victoria’s top performing SA4 regions of the last year were all in regional Victoria.

They included the Latrobe area, which surged by 27.82 per cent to a $498,000 median value.

Warrnambool ($480,000 median), Hume ($503,000), North West ($337,000) and Geelong ($725,000) also boomed.

Melbourne’s southeast, the Mornington Peninsula and northeast were also standout areas, Mr Ryan said.

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alanah.frost@news.com.au

Originally published as Melbourne’s red hot market shows first signs of cooling, PropTrack Home Price Index shows

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