How much is a house in Melbourne? As of October 2024, the median house price in Melbourne is $925,762, while the median unit price stands at $612,215.
Melbourne’s property market has seen slight declines this year, with house prices dropping 1.3% year-on-year and unit prices down 1.6%. Despite these reductions, Melbourne remains one of the most expensive cities in Australia to buy a home.
This article will explore what’s driving property prices in Melbourne, how much income you need to afford a house, and whether now is the right time to buy or wait until 2025.
How Much Income is Required to Buy a House in Melbourne?
To buy a house in Melbourne, the required income is considerably higher than the average salary. According to financial experts, you would need a minimum annual income of around $146,640 to comfortably afford the median house price of $925,762.
This figure is based on maintaining a reasonable mortgage repayment, assuming a 20% deposit and factoring in the current interest rates.
If you’re looking to buy a $612,215 unit, your income would need to be lower, but still substantial, around $97,000 per year.
Keep in mind that these estimates are based on current interest rates, which stand at 4.35% and can affect mortgage payments.
Are Houses in Melbourne Expensive?
Yes, houses in Melbourne are undeniably expensive. The median house price of $925,762 is one of the highest in the country, with only Sydney outpacing Melbourne in terms of cost. The median price for units, at $612,215, is more affordable, but still high compared to many other Australian cities.
The high price of property in Melbourne makes it difficult for first-home buyers, who often have to save for years to afford a deposit.
The competition for homes, especially in desirable inner suburbs, also drives up prices. Even though prices have dropped slightly in 2024, Melbourne remains a tough market for anyone looking to buy.
3 Types of Melbourne Properties and Their Prices
Melbourne offers a diverse range of properties suited to different budgets and lifestyles. The most common property types are standalone houses, apartments, and townhouses, each with its own features and price range.
1. Standalone Houses
Standalone houses offer privacy and space, making them highly desirable. Prices range from $500,000 to $2 million, depending on the location and property features, with homes in sought-after suburbs commanding higher prices.
2. Apartments
Apartments are popular for their low-maintenance lifestyle and access to amenities like gyms and pools. Prices range from $300,000 to $1.5 million, with properties in prime locations or with additional features like balconies often priced higher.
3. Townhouses
Townhouses provide a balance between space and convenience, typically priced between $600,000 and $1.5 million. These properties are especially popular in well-connected suburbs with good amenities and schools.
When buying a property in Melbourne, factors like pre-approval, grants, stamp duty, and legal fees should be considered. Temporary residents must also be aware of specific regulations for purchasing property in Australia.
To further research house prices in specific suburbs, check out the available houses for sale in Melbourne on Soho.com.au.
Why Are Melbourne Houses So Expensive?
There are several reasons why houses in Melbourne continue to be so expensive:
- High Demand: Melbourne is a highly desirable city to live in, with people drawn to its job opportunities, lifestyle, and amenities. The demand for housing in the city, especially in inner suburbs, continues to outpace supply.
- Limited Supply: While there has been a 7.9% increase in housing listings in 2024, the number of new homes coming onto the market remains low, with new listings dropping 3.3%. Limited supply, combined with high demand, drives prices up.
- Interest Rates: The high 4.35% cash rate has made borrowing more expensive, which has slowed the market, but the overall cost of property remains high due to years of growth.
- Government Incentives: Government programs like the First Home Owner Grant (FHOG) help some buyers, but they do little to bring down the overall cost of housing. As of 2024, the $10,000 grant applies to homes under $750,000, a price point that’s hard to find in Melbourne’s inner suburbs.
What is the Trend in Melbourne Property Prices as of 2024?
Melbourne’s property prices have slowed down in 2024 compared to previous years. The median house price has dropped by 1.3% over the past year, and units have fallen by 1.6%. This cooling in prices is largely due to the interest rate hikes introduced by the Reserve Bank of Australia.
Here’s a look at the current weekly asking prices for different types of properties in Melbourne as of October 2024:
| Property Type | Price ($) | Weekly Change | Monthly Change | Quarterly Change | 12-Month Change |
|---|---|---|---|---|---|
| All Houses | 1,248,169 | +4,840 | +1.0% | +0.2% | +4.6% |
| 3-Bed Houses | 1,102,531 | +714 | -0.5% | -1.6% | +1.6% |
| All Units | 612,068 | -168 | +0.6% | +1.1% | +3.4% |
| 2-Bed Units | 601,174 | -174 | +0.2% | +0.3% | +2.3% |
As the data shows, there has been some fluctuation in the market, but overall, Melbourne’s property market remains resilient, particularly in the unit sector.
Units are showing monthly price increases, highlighting the demand for more affordable housing options.
Should I Buy a House Now or Wait Until 2025 in Melbourne?
Deciding whether to buy a house in Melbourne now or wait until 2025 depends on your financial situation and long-term goals.
If you’re in a position to buy, there are opportunities in 2024, especially in the unit market, which has remained relatively stable. For houses, prices are down slightly, and if interest rates don’t rise further, this could be a good time to find value.
However, if you’re uncertain or stretched thin due to interest rates, waiting until 2025 might be a better option.
Experts predict that 2025 could see a 3% to 3.7% increase in property prices, especially if interest rates start to come down. Lower interest rates would improve borrowing conditions and potentially make it easier to afford a home.
Conclusion
As of October 2024, the average house price in Melbourne remains high at $925,762, while units are more affordable at $612,215. Property prices have cooled slightly this year, but the market remains competitive.
The decision to buy now or wait depends on your financial circumstances, with units offering better affordability in the short term, and houses possibly providing good value if prices rebound in 2025.
Suggested reading: Complement your current read with our expert analysis on Melbourne’s property trends: What is happening to property prices in Melbourne?
FAQs on ‘How Much is a House in Melbourne?’
Is it expensive living in Melbourne?
Yes, Melbourne is considered the 71st most expensive city in the world, according to Mercer’s 2023 Cost of Living City Ranking. It is Australia’s second most expensive city, just behind Sydney, which ranks 56th globally.
What is the cheapest Australian capital to buy a house?
Perth is the most affordable capital city in Australia to buy a house. The median house price in Perth is $530,000, which is 47.6% lower than the national median.
What is a good salary in Melbourne?
The average annual salary in Melbourne is around $78,000, based on data from PayScale as of September 2024. This is considered a good salary to maintain a comfortable lifestyle in the city.
Is Sydney or Melbourne cheaper?
Melbourne is generally more affordable than Sydney. As of December 2023, Sydney’s median house price is 1.64 times higher than Melbourne’s. Historically, the price difference has averaged 1.36 times over the past four decades.
