Market Update: Melbourne housing market steps up

New research released today by revealed that Melbourne’s house market has stepped up its performance with a growth rate of 2.27 per cent throughout March, bringing its annual growth figure up to 8.68 per cent.

However, a drop in the city’s unit market highlights a disparity in growth between the two dwelling types.

Melbourne recorded a growth rate of 1.06 per cent for its unit market during March, with the last quarter growth rate sitting at -0.08 per cent, which is a 0.08 per cent decrease in value from the previous quarter.

Sydney’s house market  documented a leading growth rate of 3.18 per cent last quarter, with a growth rate of 1.32 per cent during March.


The unit market growth rate of 1.03 per cent during the same period sets its quarter growth rate at 2.21 per cent.

Adelaide and Perth house markets were the worst performing state-capitals, with March growth rates of -0.39 per cent and -0.65 per cent, respectively.

However, both cities experienced more success in their unit markets, performing above the national average for March, of 0.18 per cent.

Overall, the capital cities that experienced the poorest performance in March were Brisbane and Darwin, which both recorded growth rates below the national average across both the house and unit markets.

Melbourne has demonstrated the most interesting performance trend throughout March, with such a huge growth in its house market offset by a drop in its unit market.

From December 2014, the growth in the value of Melbourne houses has increased, while units have been trending towards zero per cent.

The following tables demonstrate the March market performance for both houses and units across Australia:



Despite Sydney displaying consistent growth across both markets, it’s still clear to see that there is a larger divergence in growth between the two different dwelling types.

Sydney’s housing boom has really emphasised the idiosyncrasies of the two markets.

These growth rate figures raise questions regarding the longevity of a unit investment.

In fact, I would argue that new units are a mal-investment of resources in the long term, because they are developed in response to speculative investment, rather than actual demand for accommodation.

Although units will present as relatively affordable, it is clear they do not produce higher capital growth returns, particularly now when the unit market is showing signs of oversupply.

The following graph demonstrates the Sydney and Melbourne monthly growth trends in both the house and unit markets:


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Eliza Owen is the Market Analyst for

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