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Melbourne luxury suburbs tipped to hit a $3m median in 2021

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Melbourne’s luxury market is on the rise with five new suburbs predicted to hit a $3m-plus median this year.

Hot spots along the Mornington Peninsula including Portsea and Flinders – known for their multimillion-dollar beachfront pads – are set to join the new price premium, according to a new report from realestate.com.au.

Blue-chip suburb Brighton’s current $2,872,500 is also on track to hit the luxury benchmark.

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Mont Albert and St Kilda West round out the list of those expected to reach the exclusive price point, joining Toorak and Deepdene as the only Melbourne suburbs with medians above $3m.

But realestate.com.au chief economist Nerida Conisbee said more areas could join their ranks depending on how the market reacted in 2021.

“The list is assuming similar conditions and growth as last year, but we could see an even bigger rise as we know things are moving very quickly and differently to last year,” Ms Conisbee said.

“This year will be big because Melbourne’s premium market didn’t accelerate the way Sydney’s did, thanks to the extended lockdown.”

The 2021 REA Insights Property Outlook Report revealed Sydney dominated the predicted $3m-plus suburbs across Australia, due to the city’s sky-high pricing.

“The Mornington Peninsula area is becoming almost like Sydney’s beachside pricing,” Ms Conisbee noted.

“Ultimately we are seeing the push to beachside locations and people chasing quality, big homes.”

Towards the end of 2020, views per listing on realestate.com.au for homes priced over $10m had increased 150 per cent compared to prior to the pandemic.

RT Edgar Portsea’s Geoff Hall said a “perfect storm” had already dramatically pushed up Portsea house prices to the current $2.287m median.

“I’ve never seen the market go up this rapidly,” Mr Hall said.

“It’s fuelled mostly by people reassessing their lifestyle choices and the ability to work from home. We have a massive supply and demand imbalance at the moment and it’s rising prices. Auctions at the moment are selling 20-25 per cent over the reserve.”

He said the inability to travel overseas due to the pandemic meant additional buyers were flocking to the Peninsula to secure a holiday home.

“I wouldn’t be surprised if it reaches the $3m-plus bracket quite quickly,” he added.

Marshall White Port Phillip’s Oliver Bruce said St Kilda West’s low stock turnover made it a contender to reach the luxury price point.

“There hasn’t been a lot of top-end properties that change hands, so when some of the homes priced at $5m or $10m transact, they really lift up the median price,” Mr Bruce said.

“But we are seeing that people clearly want to be Bayside. There’s a number of great developments in the area so there’s a wave of money that is helping St Kilda West catch up to some of it’s neighbours like Middle Park and Albert Park.”

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POTENTIAL $3M-PLUS SUBURBS

Suburb, Current Median House Price

Brighton – $2,872,500

Mont Albert – $2.208m

Portsea – $2,287,500

St Kilda West – $2.45m

Flinders – $2.42m

Data: realestate.com.au, list calculated by estimated growth as per 2020 increase.

(12 months to December 2020)

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