BOROONDARA suburbs used to be famed as members of the “million dollar” club but today you’d be lucky to get change from $2 million if you want to buy a home in the inner east.
Canterbury, Kew, Balwyn, Surrey Hills, Camberwell and Glen Iris all have median house prices of over $2 million, the latest Real Estate Institute of Victoria figures show.
And Hawthorn and Kew East looks set to join the club before the year is out.
Real estate agent Mark Fletcher from Fletchers Balwyn said he couldn’t see growth slowing any time soon.
“The supply and demand is just so strong,” Mr Fletcher said.
“Really, unless you have family money, it is incredibly difficult to break into the market.”
Mr Fletcher, who has sold property in Boroondara for 15 years, said he remembers selling homes for $300,000 to $400,000 and has some specific instances where homes which once sold for around $600,000 previously have recently been sold for upwards of $1.5 million.
Real Estate Institute of Victoria president Joseph Walton said unprecedented population growth, increased buyer demand and record low interest rates had contributed to the strong price growth.
“Around 20 per cent of all inner Melbourne suburbs already have a median house price above the $2 million mark,” Mr Walton said.
“These suburbs include Toorak, Malvern, Brighton, Albert Park and Elwood.
“Limited stock in these highly sought after areas has resulted in significant price growth at the premium end of the market.
“Hawthorn ($1,990,000 median), Kew East ($1,975,000) and Elsternwick ($1,940,000) are all likely to join the $2 million club before the end of the year.”
Mr Walton said increased competition and buyer demand had boosted price growth within 20km of the CBD.
“Given the strength of the Melbourne property market, we expect the number of suburbs with million dollar median house prices will continue to rise,” Mr Walton said.
“The bridesmaid effect, where buyers are priced out of inner city areas, is now resulting in significant price growth in suburbs further from the city. In the past decade, Melbourne’s middle ring has seen almost 50 new suburbs record median house prices of at least $1 million.”
Tenants Union of Victoria chief executive Mark O’Brien said the housing affordability crisis had delayed home ownership for many people and put it completely out of reach for others.
He said while renting was previously something people had done “before settling down,” the latest Census showed it had become a long-term — even “lifelong” — form of housing.
“This includes low and middle income households, young families, migrants and the elderly. The fastest growing group of renters are over 55s and retirees who are likely to rent for the rest of their lives,” Mr O’Brien said.
Mr Fletcher said the best relative bargains within 20km of the city were in suburbs like Glen Iris, Ashburton and Glen Waverley.
But he cautioned that even those suburbs were quickly climbing up to the $2 million mark.
Across Melbourne, 124 suburbs have a median house value of more than $1 million, up from 20 in 2007.
This article was originally published by Greg Gliddon and Rebecca David, Progress Leader September 12, 2017