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Melbourne Unit Prices Exceed Expectations

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Melbourne unit prices reached new highs after an “almost non-existent” holiday slowdown, leading what could be a record year for apartments nationally.

Australian unit prices are only 1.4 per cent below the mid-2017 peak and could surpass this high over the next quarter, according to Domain’s house price report.

Despite a marginal rise in most capitals, both Melbourne and Canberra surged ahead, jumping 5.3 per cent and 6.4 per cent respectively.

Meanwhile the gap between house and unit ownership in Sydney and Brisbane is growing wider according to the report.

Australian unit prices to hit record highs

CityDec 20Sept 20Dec 19QoQYoY
Sydney$729,940$728,691$731,6910.2%-0.3%
Melbourne$569,677$545,581$555,7724.4%2.5%
Brisbane$395,218$399,814$407,573-1.1%-3.0%
Adelaide$350,122$350,122$308,5950%13.5%
Canberra$485,410$471,299$491,7613.0%-1.3%
Perth$347,585$399,614$333,0542.3%4.4%
Hobart$432,552$428,306$422,1291.0%2.5%
Darwin$285,539$283,893$265,6070.6%7.5%
National$574,245$566,677$569,2611.3%0.9%

^Source: Domain House Price Report, December quarter 2020

Domain senior research analyst Nicola Powell said Melbourne’s housing market has defied the odds following the shock of Covid.

“Melbourne house and unit prices rebounded over the final quarter of 2020 pushing both house and unit prices to new record highs,” Powell said.

“The traditional holiday slowdown is almost non-existent this year.

“Buyers and sellers have returned to the market with enthusiasm following a pandemic-induced retreat in activity.”

The analyst said meanwhile in Sydney the price gap between houses and units is continuing to widen.

“Over the past three decades it is rare that house and unit prices move in opposite directions annually,” Powell said.

“Weaker investor activity has disproportionately impacted unit prices because they tend to be the preferred property type.”

Lifestyle preferences brought forward by the pandemic, remote working and tumbling interest rates also supported the house market over units in Sydney, as well as in Queensland.

“The divergence of Brisbane house and unit prices continues to widen the value gap, making the financial leap from a unit to owning a house much harder,” Powell said.

However interstate interest in the Gold Coast and Sunshine Coast has pushed these areas to record highs, with both cities recording a 7 per cent increase for units.

In contrast, house prices hit record highs in all capital cities, apart from Darwin and Perth, at the end of 2020.

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