Construction activity at some of Melbourne’s cheapest houses has been booming since the start of the year, with prices rising to record highs.
The rise has been driven by the construction of new houses at a much faster rate than usual.
Melbourne’s cheapest house price index has risen by nearly 50 per cent in the past year, from $4,400 to $4.2 million.
While there is no data to back up this claim, it is estimated that around 90 per cent of the new house construction is done in the first 10 weeks of the month.
A new home in the suburbs of St Kilda, in Victoria’s south-west, has been built for $4 million.
The trend is evident across the country, with Melbourne’s new home market up by nearly 25 per cent over the past 12 months, according to data compiled by house-tracking company CoreLogic.
According to CoreLogics, the Melbourne market is worth $1.2 billion.
For Melbourne’s biggest metro, the CBD, the average house price has climbed from $1,850 to $2,850, with more than 60 per cent higher than the $1 million median price.
In Brisbane, the median house price jumped from $2.6 million to $3.1 million, while Sydney saw its median house rise from $3,400 in 2015 to $5,000.
Melbourne is Australia’s second most expensive city, behind Melbourne, with a median house value of $4 billion.
However, the city has had a very slow start to the year.
Last year, Melbourne’s median house values peaked at $3 million, before they plummeted to around $2 million in 2016, before stabilising at $1 billion in 2017.
Melbournians have had to pay more to buy homes, with the median price of a detached home increasing from $6,300 in 2015.
But while the average price of houses in Melbourne has increased, prices for properties that are already sold have dropped.
Despite the price increases, the construction boom has had the biggest impact on the rental market, with houses currently listed in the CBD rising by almost 40 per cent.
More to come.