Every month, the REIV publishes house price indices that supplement quarterly median price data. This provides more timely analysis of the market.
In August 2013, the house price index for Melbourne increased by 1.9 per cent to 142.9 which reflected a 5.2 per cent increase from a year ago.
The largest improvement in the house price index over the month to August was in the middle suburbs which increased by 1.7 per cent. This was followed by a 1.2 per cent increase in the inner suburbs and a 0.8 per cent increase in the outer suburbs.
Having a look over the past 12 months, it is clear that the three regions in Melbourne are well on the uptrend. The inner suburbs improved the most over this period increasing by six per cent. The middle and outer suburbs improved by 4.3 per cent and three per cent respectively.
Despite recent improvements, Melbourne’s house price index remains 1.3 per cent below its peak of 144.8 set in April 2011. The inner suburbs look set to be the first to reach their peak. With a house price index of 147.9 in August 2013, it is only 0.5 per cent lower than its peak of 148.7 in January 2011. The middle and outer suburbs are 2.6 per cent and 2.1 per cent below their peak respectively.
REIV CEO Enzo Raimondo said that the house price indices are likely to keep improving throughout the remaining months of the year. “This is underpinned by a range of positive indicators such as improved sentiment, higher clearance rates, lower interest rates, and an increase in transactions. It may only be a matter of time before peak prices are reached again, starting with the inner suburbs,” Mr Raimondo concluded.