House prices in Melbourne have received all the real estate press of late. Mostly due to their 20% price rise in the year to March compared to the same period last year. In comparison, units/apartments across the city rose in median price by a still considerable 14%. Given these price rises, it’s worthwhile taking a closer look at the largest unit market within the city – two-bedroom units in inner urban Melbourne.
Looking at the two-bedroom unit market in this area to the end of May, both prices and sales volumes have remained more than healthy. The median price is up 22% in the past 12 months, to $568,000. This 22% rise is well above the Melbourne urban-wide growth rate of 14%.
In fact, not only are prices up in inner Melbourne, but volumes also appear to be on the rise too. In the three-month periods ending May 2009 and August 2009, when the real estate market was travelling very well, buoyed by low official interest rates and the first home owner boost, there were about 730 sales. In the three months to May 2010, there have already been 649 sales, with a significant number of sales yet to be reported, making it very likely that last year’s volumes will be exceeded. The big factors affecting the rest of the year will be the 2010 Federal Election and if the RBA make any changes to interest rates.