A strong year for Melbourne’s property market

2007 was the third strongest year for residential property in the last 10 years according to the Real Estate Institute of Victoria’s median property prices for 2007.

The median price for a detached home in Melbourne increased by 12.6 percent from $377,500 (£173,200) in 2006 to $425,000 (£195,000) in 2007 and by 26.9 percent since 2002. The data shows that last year was a strong year, but not as strong as 2001 when the median grew by 19.76 per cent and 1999 which recorded growth of 16.75 per cent.

Two long term trends are also apparent. Firstly, over the past five years, price growth for units and apartments exceeded that for detached homes. The second trend is that the strongest long term capital growth is still in the east within 10km of the CBD and along the bay.

Outside the inner east and bayside suburbs there are five suburbs that have displayed exceedingly strong growth, offering good returns over the longer term at an affordable price. Since 2002 Frankston North’s median has grown by 80 percent, Fairfield’s by 75 percent, Aspendale’s by 74.6 percent, Springvale’s by 74.4 percent and Murrumbeena’s by 73.4 percent.

This demonstrates that while affordability continues to be an issue for many prospective home buyers, there are areas that affordable housing that is available.