Melbourne tops for home prices

NOT only was Melbourne the strongest housing market in the country in the September quarter, it was also the strongest market in the country over the past 12 months. According to Australian Property Monitors' Quarterly House Price Report, released last month, Melbourne's median house price rose by 11.4 per cent in the 12 months to September, from $438,000 to $487,000.

The most expensive suburbs and regions performed best in the past six months, but they were essentially recovering from some large price falls in the first half of last year.

The outer regions were largely insulated from these falls, because of low mortgage rates and government incentives for first home buyers.

If we look at Melbourne by region, we can see it has been the outer regions, particularly the north and outer east, that have had the biggest increases in median prices.

In the north, which starts at Brunswick and extends up through Coburg North and past Gladstone Park, the median sale price for houses rose nearly 20 per cent in the past 12 months, from $329,000 to $392,000.

The outer east region, which is the most expensive region outside the inner city, also performed particularly well, with the median price rising more than 15 per cent to $461,000.

But don't expect these rates of growth to continue for long.

As the chart above shows, these one-year growth rates are well above their 10-year averages.

Source: The Age