Melbourne’s housing market is facing a downturn, with almost 80% of its suburbs reporting quarterly declines in property values.
According to CoreLogic, a surge in housing supply and a 30% increase in new listings above the five-year average have contributed to this fall. The drop in prices is most severe in more affluent areas, especially along the Mornington Peninsula.
| Suburb | Median House Price | Price Drop (%) |
|---|---|---|
| Portsea | $2.9 million | 17.1% |
| Crib Point | $747,198 | 6.7% |
| Caulfield East | $596,159 | 5.9% |
| Bittern | $857,669 | 5.5% |
| Thornbury | $739,624 | 5.4% |
| Tootgarook | $929,771 | 5.3% |
| Sorrento | $1,928,039 | 4.7% |
| Mount Eliza | $1,520,591 | 4.7% |
| Northcote | $1,173,043 | 4.6% |
| Black Rock | $1,818,111 | 4.8% |
Areas like Portsea and Sorrento have seen some of the sharpest declines, with price reductions of over 17% in Portsea alone. Other suburbs, including Crib Point, Thornbury, and Black Rock, are also feeling the effects of increased housing supply and softer demand.
These price falls present a unique opportunity for buyers, while sellers face a more competitive market environment.
We will now take a detailed look at these suburbs, exploring the factors behind the falling prices. Keep reading to learn more about how each area is being impacted.
1. Portsea
- Median house price: $2.9 million
- Price drop: 17.1%
Portsea, known for its luxurious waterfront homes, has experienced one of the sharpest declines. The once highly sought-after suburb is now grappling with reduced buyer demand, causing a significant drop in property values.
Although it remains a premium location for holiday homes, many sellers are finding it takes longer to close deals.
Check out more properties for sale in Portsea VIC 3944.
2. Crib Point
- Median house price: $747,198
- Price drop: 6.7%
Crib Point, a quieter suburb on the Mornington Peninsula, offers a blend of rural charm and coastal living. Recently, the area has seen its housing market cool, reflecting broader trends of oversupply and reduced buyer activity in Melbourne’s outer regions.
Check out more properties for sale in Crib Point VIC 3919.
3. Caulfield East
- Median house price: $596,159
- Price drop: 5.9%
Caulfield East, home to Monash University’s Caulfield campus, has a strong rental market driven by students. However, the suburb’s house prices have not been immune to Melbourne’s market downturn. Declining investor activity and high housing stock have contributed to falling property values.
Check out more properties for sale in Caulfield VIC 3162.
4. Bittern
- Median house price: $857,669
- Price drop: 5.5%
Bittern, located on the Mornington Peninsula, has seen a decrease in demand, particularly among families seeking larger properties. The cooling market here is part of the broader slowdown in Melbourne’s outer suburbs, with house prices falling steadily over recent months.
Check out more properties for sale in Bittern VIC 3918.
5. Thornbury
- Median house price: $739,624
- Price drop: 5.4%
Thornbury, located in Melbourne’s inner-north, is a popular suburb for young professionals and families. Known for its trendy cafés and vibrant arts scene, it has long been a sought-after location.
However, the influx of housing supply in the market has caused property prices to drop. Despite its lively atmosphere, Thornbury is experiencing a decline in values as demand struggles to keep up with available listings.
Check out more properties for sale in Thornbury VIC 3071.
6. Tootgarook
- Median house price: $929,771
- Price drop: 5.3%
Tootgarook, a coastal suburb on the Mornington Peninsula, has traditionally been a favorite for holiday home buyers.
With its beachside appeal and quieter lifestyle, the area attracts families and retirees. Recently, however, property prices have fallen due to increasing supply, signaling a slowdown in the once-booming holiday home market.
Check out more properties for sale in Tootgarook VIC 3941.
7. Sorrento
- Median house price: $1,928,039
- Price drop: 4.7%
Sorrento, a historic and upscale beachside suburb, is another area affected by the market downturn. Famous for its luxury homes and coastal lifestyle, Sorrento has seen a reduction in house prices. Despite its popularity, the increase in housing stock has pushed down values, especially for high-end properties.
Check out more properties for sale in Sorrento VIC 3943.
8. Mount Eliza
- Median house price: $1,520,591
- Price drop: 4.7%
Mount Eliza is known for its large family homes and proximity to both the beach and Melbourne’s city center. This leafy suburb has long been attractive to families seeking space and serenity. However, the local housing market has slowed, with increased listings causing a dip in median house prices.
Check out more properties for sale in Mount Eliza VIC 3930.
9.Northcote
- Median house price: $1,173,043
- Price drop: 4.6%
Northcote, located in Melbourne’s inner-north, is celebrated for its artsy vibe, cafés, and proximity to the CBD. A popular choice for young families and professionals, the suburb’s house prices have declined due to a combination of increased housing stock and fewer buyers in the market.
Despite this, Northcote remains a highly desirable area with plenty of long-term potential for growth.
Check out more properties for sale in Northcote VIC 3070.
10. Black Rock
- Median house price: $1,818,111
- Price drop: 4.8%
Black Rock, a picturesque suburb along Port Phillip Bay, is known for its beachside living and golf courses. Traditionally a high-demand area for affluent families, the suburb has seen a dip in property values.
The current decline in house prices is reflective of broader trends in Melbourne’s market, where even premium suburbs are experiencing downward pressure due to increased supply.
Check out more properties for sale in Black Rock VIC 3193.
Summary
Melbourne’s housing market continues to cool, with price declines observed in nearly 80% of its suburbs. Affluent areas such as Portsea, Black Rock, and Sorrento have been hit particularly hard, with supply far outpacing demand.
The Mornington Peninsula, in particular, has seen significant drops in property values, making it a key region to watch. While the market correction may provide opportunities for buyers, sellers face challenges in adjusting to the current conditions
FAQs on ‘Melbourne Suburbs Where House Prices Are Falling’
1. Are house prices in Melbourne dropping?
Yes, house prices in Melbourne are dropping, with around 80% of suburbs reporting declines. Affluent areas like Portsea have seen the sharpest falls, and the overall market continues to experience downward pressure due to increased housing supply.
2. Which Melbourne suburbs have lost ground in property prices over the last five years?
Suburbs like Carlton have seen the biggest declines in unit and apartment prices, dropping by 33% in the last five years. Coburg follows closely, with an 18% decrease in unit prices during the same period.
3. What city in Australia has seen house prices fall?
Melbourne experienced a 1.1% fall in dwelling prices for the September 2024 quarter. Other cities like Canberra, Hobart, and Darwin also posted declines, while cities like Perth, Adelaide, and Brisbane saw price increases.
4. What are the most affordable suburbs to live in Melbourne?
Some of the most affordable suburbs in Melbourne include Craigieburn, Cranbourne, Melton, and Hoppers Crossing, where buyers can find more budget-friendly housing options compared to other areas of the city.
