Linda has had her Tarneit home on the market for more than six months. Picture: Jay Town
Source: Herald Sun

MELBOURNE’S median house price has lost more than $800 a week since the property market peaked late last year.

House prices have fallen 4.4 per cent from a December high and apartment prices are down 3.4 per cent after hitting their price ceiling in November, according to figures from property research firm RP Data.

Melbourne’s median house price hit a record $521,000 in December and has lost about $23,000, or $818 a week ever since.

The city’s median apartment price peaked at $440,000 in November and has since lost close to $15,000, or $468 a week.

A suburb-by-suburb breakdown of Melbourne from November until the end of May, the last month suburban figures are available, reveals big winners and losers.

The biggest falls have been recorded for units in Tarneit and Ivanhoe East and houses in Langwarrin South, where median prices have all dropped by more than 30 per cent. The median price of units in Altona North, Notting Hill and Mount Eliza has fallen by more than 20 per cent.

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It’s not all doom and gloom, however, with small fortunes being made in Kooyong, Hampton East and Seddon. The median house price in Kooyong has risen by more than 40 per cent from November to June and the median unit price has risen by about 35 per cent in Hampton East and Seddon over the same period.

Those gains are the exception rather than the norm, with 365 of the suburbs measured by RP Data showing nil or negative capital growth and 275 recording gains.

RP Data provides a separate unit and house listing for each suburb in Melbourne.

Senior research analyst Cameron Kusher said the falls were inevitable given Melbourne’s strong performance in recent years.

“Since the start of 2007, property values have risen by around 50 per cent, so we would expect the market to underperform after dramatically outperforming,” Mr Kusher said.

“It was inevitable that the Melbourne market would slow at some point and that seems to be happening now.”

Melbourne continues to groan under a glut of listings with figures from SQM Research showing 45,700 properties were on the market at the end of July, a 6 per cent increase over the month and a 45 per cent rise on the same time last year.

With the spring selling season about to start, SQM Research managing director Louis Christopher said stock levels could hit 60,000 by the end of October.

“That is a major oversupply situation and it is likely to cause housing prices to continue to decline well into the final months of this year and into early next year,” Mr Christopher said.

“It’s a simple economic equation – if you have supply above demand, that will weaken house prices and that is what is happening in Melbourne.”

Linda, a homeowner in Tarneit, listed her neat and tidy three-bedroom, two-bathroom unit in February. Despite hosting open for inspections every fortnight, she is yet to receive an offer – a far cry from when she sold her former home in Roxburgh Park in 2008, wrapping up a sale before the property appeared online.

“It has been a bit of a shock,” Linda said.

“I’m not really having that many people come through the house. The numbers at open days have been low. There have been times when I am getting no one at all. I haven’t had any feedback on the house as well, which makes it difficult to know what to do.”

First National Real Estate Westwood agent Rob Westwood said business was down 10 to 20 per cent in Wyndham.

“Prices have certainly come back in the past six months, but it has really become noticeable in the past couple of months,” he said.

“Everyone has a dream figure they want for their home and in a good market you can hang out for it, but today, you can’t. We are saying to vendors if you haven’t had a fair bit of interest in the property in the first three or four weeks, you really need to look at price.”

Pockets of Melbourne’s real estate market continue to outperform. Unit prices in Hampton East have risen 36.1 per cent and house prices 6.3 per cent since November.

“When I talk to the other offices, we seem to be performing at a better rate in both terms of sales and volume,” Buxton Hampton East director Adam Gillon said.

“Business has been good. The average house price here is around $750,000, but we are right next to Hampton where the average would be $1.3 million, so that makes us an attractive market.”

daggej@heraldsun.com.au