Melbourne Properties Expected to Reach Peak

Values and prices for Melbourne properties are expected to reach their peak over the oncoming months, which may be a sign of encouragement for anyone thinking of selling this spring season.

This was seen through activity recorded in the month of September, where values rose by 2.4 per cent across the city, according to the RP Data Home Value Index. Over the quarter this translates into a total of 5 per cent - bringing real estate in Melbourne almost on par with value growth seen in Sydney.

Melbourne properties have not quite reached their peak for value growth, however RP Data predicts this will occur during spring.

In an October 3 blog post, RP Data Victoria Housing Specialist Robert Larocca stated that the rises in values are a sign of confidence in the market and buyers are returning to the market in droves.

"If these conditions continue it will drive further growth, however the buoyant market is also likely to encourage more owners to sell, hopefully tempering the growth in prices," Mr Larocca said.

RP Data's prediction for Melbourne property value growth over spring was supported by the Real Estate Institute of Victoria (REIV), which stated that prices are also expected to reach their peak.

Properties in Melbourne only have a small way to go until they reach their peak in price, according to the REIV, with dwellings just 1.3 per cent below their 2011 peak.

The REIV said inner, middle and outer suburbs are all "well on the uptrend", with price growth recorded in all three areas over the month of August.

Properties located in Melbourne's inner suburbs are predicted to reach their peak first, as the area is only 0.5 per cent below its January 2011 peak of 148.7 points. Middle and outer suburbs are expected to follow after they make up their peak through increases of 2.6 per cent and 2.1 per cent respectively.

Growth in prices is expected to continue through spring and the rest of the year, according to REIV Chief Executive Officer Enzo Raimondo.

"This is underpinned by a range of positive indicators such as improved sentiment, higher clearance rates, lower interest rates, and an increase in transactions," Mr Raimondo said.

"It may only be a matter of time before peak prices are reached again, starting with the inner suburbs."