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Melbourne house prices in inner, eastern suburbs rise despite overall prices flatlining

A string of inner and eastern suburbs has seen huge house price jumps this year even as Melbourne prices stalled for the September quarter, a new report shows.

Suburbs including Hawthorn, Collingwood and South Yarra recorded rises of between 29.6 and 36.5 per cent in their median house prices for the year to September, compared to the prior year, the Domain House Price Report released on Thursday showed.

hile Hawthorn saw the largest price growth for the year, it was only the sixth most expensive suburb in Melbourne with a median price of $2.32 million. Toorak had the highest median at $3.888 million followed by Canterbury at $2.7 million and Brighton at $2.65 million.

Melbourne’s overall median stayed flat for the September quarter at $875,980, but was up for the year by 1.6 per cent.

Median prices for individual suburbs are based on sales over the past year and reflect not only the COVID-19 lockdown period, but also the end of 2019 and the start of 2020, when the market was in the “full throes of a recovery”, Domain senior research analyst Nicola Powell said.

“It’s been a very choppy 12 months in terms of market dynamics,” Dr Powell said.

“In some of these areas that have had strong levels of growth, actually that growth is being supported by the stronger performance of the earlier six months of the past year.”

However, she said when looking at broader regions of the city for the quarterly price changes, the inner eastern and inner urban areas had been “remarkably resilient”.

“Over that quarter it’s only been a very marginal fall, and in the inner suburbs they actually went up,” she said.

In one of those inner suburbs, Collingwood, property developer Matt Thong is selling his investment property. It’s a three-bedroom warehouse conversion at 3/127 Cambridge Street with an asking price of $1.43 million to $1.53 million.

Prices in the suburb have seen the second highest growth for the year, bringing the median house price to $1.15 million. The median unit price also saw gains of 9 per cent to $616,000.

Mr Thong is hoping the uniqueness of his property coupled with some strong post-lockdown demand from buyers will hold him in good stead to fetch a strong price.

“I feel that there’s a bit of a window of opportunity for sellers,” Mr Thong said. “Jumping out of the blocks from the dullness of COVID and the restrictions – this is a great time.”

Units in Balwyn and Maidstone saw the biggest price increases for the year (36.6 per cent to $902,500 and 35.4 per cent to $582,250 respectively).

Unit prices dropped the most in Toorak (-11.1 per cent to $917,500).

Source: Domain. Prices the year to September 2020

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