A rise in the median house price in Melbourne may encourage to rent property in Melbourne, as the average cost of a property now stands at $561,500, figures from the Real Estate Institute of Victoria (REIV) show.
In the three months to March, there was a 5.1 per cent rise in property prices compared to the previous quarter, which may discourage first home buyers from entering the market.
Chief executive officer of the REIV Enzo Raimondo explained that there are all sorts of factors currently at play in the Melbourne property market.
He noted that there has been a decline in demand for units and apartments, which is primarily due to a rise in supply of inner city apartment stock.
Meanwhile, there have been changes to the clearance rate, which increased from 61 per cent in the March quarter last year to 62 per cent in the December quarter.
The clearance rate rose further, reaching 69 per cent in the three months to March 2013.
The REIV recently analysed rental trends throughout Melbourne, showing that younger people are generally more attracted to the inner and outer suburbs.
Middle suburbs were shown to have more middle-aged renters and mortgage holders.