Hot or Not? An Analytical View of Melbourne’s Property Market for 2024

Melbourne’s property market has manifold sub-markets within the wider market that have performed in a different way. Freestanding houses in near vicinity to the Central Business District (CBD) or within desired school catchment areas have showed the most constant performance. The situation presents a glaring contrast – while some properties have excelled, others have not performed well in comparison.

Yet, the unanimity among experts is that healthy population growth and limited supply will continue to drive property prices upward as the market advancements through this next phase of the cycle. This upward trend is likely to continue in spite of the Reserve Bank’s continued interest rate hikes intended at curbing Australia’s rising inflation levels. Though Melbourne’s property market is lagging behind Sydney and Brisbane, there are perfect hints that it will continue its upward path.

Here is an analysis:
The data shows information about suburbs in Melbourne, Australia, including their region, the average home value(AVM) 12 months ago, the current AVM, and the change in AVM in dollar terms over the last 12 months.

• Toorak, a suburb in Melbourne’s inner region, had an AVM of $4,148,336 twelve months ago, which has increased by $237,486 to the current AVM of $4,385,822.
• Canterbury, located in Melbourne’s inner east region, had an AVM of $3,121,281 a year ago, and it has risen by $160,638 to the current AVM of $3,281,919.
• Balwyn, another suburb in the inner east region, had an AVM of $2,702,699 twelve months ago, and it has increased by $156,400 to the current AVM of $2,859,099.
• South Yarra, in the inner region, had an AVM of $1,891,053 a year ago, which has increased by $136,311 to the current AVM of $2,027,363.
• Surrey Hills, in the inner east region, had an AVM of $2,163,709 twelve months ago, and it has risen by $125,312 to the current AVM of $2,289,021.
• Mont Albert, another suburb in the inner east region, had an AVM of $2,077,778 a year ago, and it has increased by $122,239 to the current AVM of $2,200,017.
• Wheelers Hill, located in the south-east region, had an AVM of $1,301,619 twelve months ago, which has increased by $115,706 to the current AVM of $1,417,325.
• Balwyn North, in the inner east region, had an AVM of $2,102,890 a year ago, and it has risen by $111,670 to the current AVM of $2,214,560.
• Middle Park, in the inner region, had an AVM of $2,682,799 twelve months ago, which has increased by $107,325 to the current AVM of $2,790,123.
• Park Orchards, a suburb in the outer east region, had an AVM of $1,900,536 a year ago, and it has increased by $103,194 to the current AVM of $2,003,730.

However, on the other side of the story, Yimby Melbourne, a housing advocacy group has published a report on 11th April which demands introducing legit housing targets for the 19 local governments in inner Melbourne, as well as an remodeling of restrictive zoning rules.

A new report classifies Boroondara, a rich area with potential for growth, as the suitable location for new housing development. The report mentions a target of 4,900 new homes for Boroondara in the next year, the highest among the proposed locations. Boroondara, located east of central Melbourne, take in prosperous suburbs like Balwyn, Camberwell, Canterbury, Hawthorn, Kew, and Surrey Hills.

Jonathan O’Brien, a lead organiser of Yimby Melbourne said: “Boroondara has not been pulling their weight for decades. An area that’s made up of empty nesters is not an area that’s going to be sustainable for long and this was mainly due to a ‘nimby local council’ and community opposition to high-density housing.”

To solve out this problem, Yimby Melbourne advocates that a three-storey height limit should be “upzoned” to four storeys, while all low-density residential within 1km of train stations and 500m of tram stops should also be rezoned to allow for six-storey developments.

In the meantime, Boroondara council opposed proposition of such a policy without any detailed analysis of the impact on infrastructure such as schools, hospitals, public open space, sewer systems, drainage capacity and public transport capacity.

The Victorian government has been formulating to issue its own draft housing targets for councils at the end of the month for consultation.
The planning minister, Sonya Kilkenny, said the government was working with councils to “build more homes in the areas where people want to live – close to jobs, transport and essential services”.