Melbourne luxury units outpace houses

Despite luxury property outperforming in most capital city markets, Melbourne’s high-end housing market only managed to keep pace with median-price houses over the past decade.

According to Ray White, Melbourne’s luxury house prices sat at $2.5 million in 2023, 70.7 per cent higher than a decade earlier in 2014, while the median house price was at $933,000, 71.1 per cent above 2014 levels.

Notably, Melbourne’s luxury unit prices performed better than houses over the same period of time.

Melbourne’s luxury unit prices grew 50.9 per cent vs the 27.4 per cent for median price units – almost double the growth rate.

Melbourne was the only city where luxury prices grew greater than median prices, but it was also the city with the lowest price growth across major cities.

In the past year, luxury house prices increased by 4.5 per cent, just slightly higher than median house price growth rate of 4.2 per cent.

Luxury unit prices increased 4.5 per cent, while median unit prices only rose 2.9 per cent.

In terms of the level of transactions, Melbourne saw the most significant drop across all major cities with luxury house transactions falling by 24 per cent to 525 houses and luxury unit transactions falling by 20 per cent to 131 units.

Despite this, Melbourne is still growing. Compared to 10 years ago, Melbourne is selling almost five times more luxury houses and two times more luxury units.

Toorak was named as the most popular suburb for both luxury houses and luxury units with 65 houses and 29 units sold, respectively.

This was closely followed by Brighton with 53 houses, then Kew with 39.

Other popular house markets that saw high transaction levels included Hawthorn, South Yarra, Malvern, Armadale, Hawthorn East and Canterbury.

For luxury units, Toorak was very much the dominant suburb. The runner-up, Melbourne (CBD), had almost half of Toorak transactions with 15 units sold.

Other popular luxury unit markets were South Yarra, East Melbourne, Kew, Port Melbourne, Hawthorn, St Kilda and Balwyn.

On a national level, only Toorak in Melbourne made it into the top ten for sales volumes, coming in at fourth position.

Melbourne also saw a slight reduction in the percentage of sales that were classified as luxury, falling four per cent to 19% over the past decade.

Nationally, luxury price growth in both houses and units was smaller than median price growth over the past 12 months. The first time this has occurred in a decade.

Luxury house prices increased by 6.2 per cent while median property prices increased by 7.7 per cent.

While median price growth for units was also greater at 5.7 per cent compared with luxury price growth at 5.5 per cent.

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