Melbourne Property Market Update April 2025

Home prices surged 6.8% in Melbourne

Dear Fellow Property Investor,

The average asking price of a home in Australia continued to rise in the fourth quarter, while data elsewhere pointed towards a fall in new home sales. 

An index measuring the weighted average of prices for established houses in the eight capital cities increased 5.2% quarter-on-quarter in the October to December period, after the upwardly revised 4.4% rise in the previous quarter, the Australian Bureau of Statistics reported on Monday. Economists were looking for a 4% quarterly gain. 

Home prices surged 6.8% in Melbourne, while prices in Sydney and Perth increased 5% and 5.7%, respectively. House prices were also up in Brisbane, Adelaide, Canberra, Hobart and Darwin. 

On a yearly basis, home prices increased 13.6% in the fourth quarter - again exceeding expectations for a 11% gain after the 6.6% rise in the third quarter. 

But separate data released today showed that new home sales fell sharply in December as interest rates rose and the impact from the first home owner boost continued to wane. 

The Housing Industry Association (HIA) announced new home sales in Australia were down 4.6% month-on-month in December. Detached new home sales fell 6.2%, while the volatile apartment sector saw a 10.4% surge in sales. 

Harley Dale, chief economist at HIA, said the result was not a surprise given the impact of stimulus from first time buyer-related activity was receding. He added there was little evidence that existing home owners were choosing to trade up so as to kickstart a new home building cycle. 

Meanwhile, a gauge measuring inflation in Australia showed an increase of 0.8% in January compared to the previous month, a report from TD Securities and Melbourne Institute showed, representing the largest increase in six months. It follows a 0.3% increase in December.