The market is heading towards the anticipated cyclic trough

With property price falls continuing over Q2 2022, it’s clear the market is quickly heading towards the anticipated cyclic trough – a lowpoint many commentators believe is necessary to get the sector back on track.

The median Metropolitan Melbourne house price now sits at $1,081,000, a notable decrease of 2.9% in just one quarter. However, the incredible growth during 2021 means the median is still 6.8% higher than a year ago.

While traditionally, falling house prices ease affordability concerns, the rapidly rising interest rates and decades-high inflationary figures means the landscape remains challenging. The upward mobility in interest rates impinges on prospective buyers’ ability to secure finance, and is being reflected in consumer confidence ratings, which have dropped each month this year and are likely to continue falling until there is some respite in the rate rises.


Anchoridge in Armstrong Creek is fast becoming the jewel of Geelong and the gateway to the iconic Surf Coast.

Regional Victoria continues to outshine the surrounding noise

House prices in the inner and middle rings dropped 1.3% in Q2 to $1,737,000 and $1,223,000 respectively. Conversely, outer ring house price rose by 0.9% to $856,000 – potentially demonstrating the elongated trend towards remote work arrangements. Year-on-year both middle and outer ring homes increased by 1.3% and 6.5% respectively, while inner ring houses fell 1.6%.

Following a similar pattern, units and apartments in Melbourne’s outer ring also bucked the price fall trend this quarter and rose 0.5% to $631,500. Inner ring units dropped 0.8% to $650,500 and those in the middle ring decreased 1.4% to a median of $736,000. Across the sector, the $670,500 median landed 1.3% lower than the previous quarter and 1.1% lower year-on-year.

Regional Victoria followed a different path to Melbourne, with positive growth in both house and unit prices. Median house prices now sit at $625,000, while units and apartments are $435,500. This represents 1.3% and 2.8% growth for the quarter respectively, and a 12.3% and 12.5% lift year-on-year. While interest rates are rising and lending conditions are increasingly arduous, the benefits that life in Regional Victoria offers continues to outshine the surrounding noise.

This article references our Q2 2022 Residential Market and Economic Update. For the full report, click here.