Essendon was the standout suburb this quarter; its median house price increased by 14.4 per cent to $1.15M and it had a 79.1 per cent clearance rate for auctions. It also recorded a 13 per cent increase in the median price of a unit or apartment. Affordability continues to be a concern and buyers have targeted a range of suburbs with medians below half a million last quarter, for example Mooroolbark, Hillside, Melton and Frankston South. Driven by population growth, a number of the city’s growth suburbs, such as Roxburgh Park, Craigieburn, Tarneit and Werribee, also featured in the best performing suburbs. Similar conditions were apparent in the unit and apartment market, the median for a unit or apartment was $470,000 in the quarter, a minor increase of 0.3 per cent. Demand for housing in regional Victoria was slightly stronger than metropolitan Melbourne this quarter. The median price of a house in regional Victoria increased by 1.7 per cent from $300,000 in the June quarter, to $305,000 in the September quarter.

August boasted good news for the labour market as employment data showed that the national unemployment rate decreased to 5.1 per cent for the month, with the participation rate decreasing slightly from 65.5 per cent to 65.4 per cent.  Victorian unemployment remained unchanged for the month at 5.5 per cent, a very positive sign given the increase in the participation rate from 65.4 per cent to 65.9 per cent for the month.  The strong employment figures will play a big part in supporting confidence in the housing market leading up to the spring selling season.

 

All five component indices fell in September, with the largest increase recorded by the component index reflecting economic conditions next 12 months (-7.2%), followed by the component index reflecting family finances next 12 months  (-6.1%) and the component index reflecting economic conditions next five years (-6.1%). Overall, the current conditions index decreased by 2.7 per cent, while the expectations index decreased by 6.5 per cent.  This month’s index comes on the back of news of the cash rate remaining unchanged for the fourth consecutive month. The All Groups CPI rose 0.6 per cent in the June quarter 2010 and rose 3.1 per cent through the year.   Melbourne's CPI rose 0.6 per cent for the quarter and 3.1 per cent for the year, following the Australian trend. The most significant price rises this quarter were for alcohol & tobacco (+5.9%) and health (+2.2%), while the most significant offsetting price falls were for recreation (-1.8%) and food (-0.3%).