Melbourne’s median sale price for houses has shot past $850,000 for the first time, as the market resurgence continues to steam ahead.

A typical house in the city sold for $859,500 in the final three months of 2019, according to the Real Estate Institute of Victoria, which confirmed the figure as its highest median house price on record.

It came off the back of consecutive quarters of bumper growth, with prices soaring 4.5 per cent in the three months to September 30 and 3.7 per cent in the same period to December 31.

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Before this, the REIV recorded five straight quarters of decline.

REIV president Leah Calnan said the Melbourne market had recovered from the downturn of late 2017 to mid 2019 to “set new heights”.

“Buying in Victoria is a great investment — house and unit values are growing across the entire state,” she said.

Port Melbourne house prices skyrocketed 28.4 per cent in the last quarter of 2019 to hit a $1.67 million median.

Other big movers were Strathmore (up 22.3 per cent to $1.461 million), Sunshine (22.2 per cent, $815,500) and Mitcham (20.2 per cent, $1,128,500).

Frank Gordon managing director Frank Callaghan said the Port Melbourne market had started to take off after May’s federal election, when interest rates dropped and banks stopped “rationing credit”.

“Days (properties were spending) on the market became shorter, clearance rates improved and there’s been a strong bounce back in values,” he said.

“Better quality properties have come to market, whereas previously vendors wouldn’t have taken the chance.”

A grand Victorian mansion, originally built for a Port Melbourne mayor at 344 Graham St, had “substantially exceeded the vendors’ expectations” to fetch $2.385 million in November, he said.

In Sunshine, Douglas Kay partner Peter Kay reported unprecedented buyer demand, with the suburb notably boosted by its selection as a major hub on the long-awaited rail link to Melbourne Airport.

“It’s probably the biggest thing that’s happened in Sunshine since the Harvester Works opened up here more than 100 years ago,” he said.

Mr Kay tipped another “big year” for the western suburb, with buyers remaining unusually active in the market throughout the festive season and being forced to compete for “an incredibly short supply of properties”.

The REIV also reported a record result for Melbourne’s unit and apartment market in the December quarter, with the citywide median rising 3.8 per cent to $639,000.

Prices soared more than 45 per cent in Ormond, to a $713,000 median, and South Yarra, $780,000, in that period. Gains exceeded 30 per cent in Abbotsford, Black Rock, Thornbury and Murrumbeena.

Regional Victoria notched quarterly median gains of 2.2 per cent to $422,500 for houses and 3.2 per cent to $307,500 for units.

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samantha.landy@news.com.au

SUN SHINING ON SUNSHINE

Hai Nguyen and Belinda Vo were thinking of their children when they bought into Sunshine almost three years ago.

A primary school, kindergarten and childcare centre surround the three-bedroom California bungalow at 4 Alice St they now share with sons Alex, 4, and Zac, 2, with several parks and a leisure centre also nearby.

And their quiet street is considered one of the western suburb’s most sought-after stretches, being tree-lined and offering easy access to public transport.

Mr Nguyen said the best part was the neighbourhood had only gotten better since they bought in.

“The facilities are being continually upgraded,” he said.

“The area is gentrifying.”

Douglas Kay agent Peter Kay said these lifestyle perks — coupled with a major upcoming infrastructure boost in the form of the airport rail link — had made the once-stigmatised Sunshine a destination for homebuyers.

“Plus we’re the most affordable suburb within 11km of the CBD,” he said.

“There’s been an overwhelming push to get into the market by owner-occupiers.

“In 10 years in the area, I have never seen such demand for well-presented homes.”

Mr Kay said Sunshine wasn’t exempt from the downturn that hit the greater Melbourne market from late 2017.

But it didn’t fall as far as other postcodes, and had bounced back with more gusto than most.

The suburb’s 22.2 per cent median house price rise made it the city’s third-best-performing suburb of the December quarter, according to the Real Estate Institute of Victoria.

“We finished 2019 with some of our best months ever, and we’re expecting another big year in 2020,” Mr Kay said.

This has inspired confidence in Mr Nguyen, who works in finance, and Ms Vo, a radiation therapist, as they prepare to list their Alice St home to move closer to family in Adelaide.

The 508sq m property, which also features a man cave and alfresco terrace, will have a $850,000-$890,000 price guide for its forthcoming March auction, to be handled by Mr Kay.

Mr Nguyen said they “wouldn’t be selling” and leaving Sunshine if not for the interstate move.

MELBOURNE’S TOP GROWTH SUBURBS

Houses

Port Melbourne: median price up 28.4% to $1.67m

Strathmore: 22.3%, $1.461m

Sunshine: 22.2%, $815,500

Mitcham: 20.2%, $1,128,500

Cheltenham: 19.1%, $1.267m

Kew: 17.8%, $2.515m

Wheelers Hill: 17.3%, $1.15m

Nunawading: 16.8%, $1.05m

Blackburn South: 16.1%, $1.19m

Blackburn North: 16.1%, $1.151m

Richmond: 13.9%, $1,332,500

Essendon: 13.3%, $1.52m

Thornbury: 13%, $1,242,500

Mt Martha: 12.5%, $1,215,500

Bulleen: 11.9%, $1.25m

Coburg: 11.8%, $1.141m

Northcote: 10.4%, $1.48m

Glenroy: 10.2%, $791,500

South Morang: 9.9%, $665,500

Hawthorn: 9.4%, $2.353m

Units

Ormond: median price up 45.8% to $713,000

South Yarra: 45.3%, $780,000

Abbotsford: 37.4%, $625,000

Black Rock: 36.7%, $1.135m

Thornbury: 36%, $720,000

Murrumbeena: 30.6%, $640,000

St Kilda: 21.5%, $595,500

Docklands: 18.1%, $665,000

Sandringham: 17.9%, $920,000

Hawthorn East: 16.7%, $650,500

Beaumaris: 16.1%, $1.251m

Frankston: 14.8%, $480,000

Richmond: 13.2%, $670,000

St Kilda East: 13.1%, $622,000

Balaclava: 13%, $610,000

Cheltenham: 12.9%, $700,000

Carnegie: 12.5%, $737,000

Prahran: 10.6%, $627,000

Northcote: 10.3%, $562,500

Collingwood: 10%, $607,500

Source: REIV, for December quarter 2019. Minimum of 30 quarterly sales required