Melbourne house prices have fallen over the past year despite record levels of immigration, new figures show.
The Victorian capital, which receives a large proportion of overseas migration, saw its median price fall 1.1 per cent in the year to August, despite home values being at record levels in Sydney, Brisbane, Adelaide and Perth.
With a median house price of $929,715, Melbourne is now Australia’s fourth most expensive market for a backyard home, despite being the country’s second most populous city.
Melbourne, apart from Hobart, was the only capital market to see prices fall annually, CoreLogic data showed.
This was despite a record 547,300 net migrants moving to Australia in 2023, the most on record in a calendar year.
In the last financial year, which ended in June, that number fell to a still-high 469,140, Australian Bureau of Statistics figures showed.
Unlike Sydney, Melbourne is not experiencing a huge exodus to other states due to lack of access to housing.
But Victoria has an investor tax that forces property owners to pay a flat annual fee of $975 since January.
Melbourne house prices have fallen over the past year despite record levels of immigration, new figures show (pictured is Flinders Street Station)
Eliza Owen, head of research at CoreLogic, said Victoria’s investor tax was impacting Melbourne house prices as the state also saw a huge increase in housing supply.
Eliza Owen, research director at CoreLogic, said Victoria’s investor tax was impacting Melbourne house prices as the state also saw a big increase in housing supply.
“The increased tax burden on investment property owners in Victoria, as evidenced by an annual fall in the number of secured investment loans in the state, may be deterring some demand,” he said.
“But it’s not the only factor at play. Supply is also a major factor for Victoria, where the state saw more housing completions over the past decade than any other state or territory.”
Nationwide home values rose 0.5 percent in August, marking the 19th consecutive monthly increase.
But in Melbourne, house prices have fallen or remained stable for six consecutive months, and its median price ranks fourth, behind Sydney, Canberra and Brisbane.
Average home prices there fell by 0.2 percent last month.
The story was different in the other capitals of the continental states.
Sydney’s median home price rose 0.3 per cent last month to $1.472 billion, up 5.7 per cent from a year earlier.
Brisbane values rose 0.9 per cent in August to $966,382, representing an annual increase of 14.1 per cent.
Queensland’s capital was Australia’s best-performing apartment market, with values up 1.7 per cent in August to $653,325, 19.4 per cent stronger on the year.
The Victorian capital, which receives a large share of overseas migration, saw its median price fall 1.1 per cent in the year to August, despite home values being at record highs in Sydney, Brisbane, Adelaide and Perth.
Adelaide’s median house price rose 1.4 per cent last month to $844,963, up 14.5 per cent year-on-year.
Perth was again Australia’s strongest market, with house prices rising 1.9 per cent in August to $818,839, a massive 24.3 per cent annual increase.
By contrast, Hobart was Australia’s worst-performing property market, with values falling 0.4 per cent in August to $692,606, down 2 per cent on the year.
Canberra house values fell 0.3 per cent in August to $967,933, marking weak annual growth of 2.6 per cent, with Brisbane forecast to overtake it in 2024 to become Australia’s second most expensive property market.
Darwin, Australia’s most affordable capital city, saw its median house price fall 0.1 percent last month to $589,392, a weak 2.9 percent annual increase.
The Northern Territory’s capital is the only market where an average full-time worker earning $100,017 can get a loan to buy a median-priced home with a 20 per cent deposit.
Traditionally affordable markets are now seeing the strongest growth, with property prices in Kwinana, in south-west Perth, up 31.4 per cent over the past year to $638,651.
In Brisbane, the Springwood-Kingston area of Logan saw its median price rise 25.5 per cent over the year to $724,312.
Homes are so expensive that unit values last month grew at a faster rate than backyard homes in Sydney, Brisbane, Adelaide, Perth and Hobart.
“Home values cannot continue to rise at the same rate in the mid-sized capital cities of Perth, Adelaide and Brisbane when affordability is becoming increasingly difficult, particularly in the context of high interest rates, looser labour market conditions and cost-of-living pressures,” Ms Owen said.
CoreLogic’s home value measure, which combines houses and units, showed Melbourne, with a median home value of $776,044, was cheaper than Perth ($785,250) for the first time since 2015.
It’s also cheaper than Adelaide’s $790,789 and well behind Brisbane’s $875,040.