The most recent quarter showed strong demand for larger, family sized 3-bedroom apartments in the CBD, even while smaller apartments faced tough selling conditions.
While smaller apartments in the CBD saw slight price declines, larger units saw heavy interest. This pushed the Melbourne CBD’s unit median price up by 8.4 per cent overall. The median prices of 1-bedroom and 2-bedroom apartments fell by 2.8 per cent and 0.7 per cent respectively in the last quarter, while 3-bedroom apartments rose in price by 9.1 per cent over 3 months and 14.1% annually.
Over the longer term, 3-bedroom median prices in the CBD have also appreciated at a much faster rate. Over the last 10 years 1-bedroom and 2-bedroom apartments only rose by 2.9 per cent and 1.8 per cent respectively in the last quarter, while 3-bedroom apartments’ prices jumped by 44.3 per cent.
This increased demand for larger apartments was seen in the whole City of Melbourne which had its median apartment price rise by 9.0 per cent last quarter, the fifth highest price increase for apartments, in the municipality with the most apartment sales.
Among suburbs within the City of Melbourne median prices for 2-bedroom apartments fell in 7 of 9 suburbs. 1-bedroom prices fell in 4 of 9 suburbs with the most growth being only 0.6% in East Melbourne. Meanwhile median prices for 3-bedroom apartments rose or stayed the same in 6 of 8 suburbs.
The shortage of larger family sized apartments has led to the median price of 3-bedroom CBD apartments ($1.255m), being higher than two average 2-bedroom units ($565,000)
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