Melbourne’s house prices have soared to record levels over the last few months…

Melbourne’s median house price was $485,000 in the December quarter, up a record 12.8 per cent from the September figure of $430,000. The result represents a 23.4 per cent climb on the median price in the December 2006 quarter.

Institute chief executive officer Enzo Raimondo says the leap is remarkable but not surprising given a strong 2007: “Growth in the prices people are willing to pay for a home is being driven by strong demand,” he says. “The Victorian economy is going very well which is leading to an increase in migration, confidence and what people are willing to pay. 

“It is interesting that as the number of homes on the market has increased, by 21 per cent compared to the December 2006 quarter, so too has demand. The median price of a Melbourne (house) has now doubled in seven years. In the March quarter of 2000 the median was $242,128,” Raimondo says.

However, he believes the record leap in the December quarter “is clearly not sustainable in the medium or longer term”.

The five biggest movers during the December quarter, growth wise, were:

• Woodend, up 23.4 per cent to $432,000;
• Essendon, up 22.1 per cent to $865,500;
• Richmond, up 21.5 per cent to $789,000;
• Templestowe, up 21.1 per cent to $744,500; and
• Glenroy, up 18 per cent to $382,000.

In the unit market, prices climbed 5.4 per cent over the December quarter as the median hit $390,000. That’s a 21.9 per cent rise over a year earlier.