Auction clearance rates have improved in Melbourne, but prices fell in October. Source: HWT Image Library
MELBOURNE'S property values have taken a hammering, despite improving clearance rates and signs of growing buyer confidence.
Figures from RP Data released today show a 1.1 per cent fall in property values across October, slightly worse than a national one per cent drop.
It represents a $5170 cut to the price of Melbourne's median $470,000 property.
In a further blow, year-on-year values for Melbourne property were down 4.4 per cent.
But there is a silver lining, with property values still growing 0.4 per cent over the past quarter - and with recent auction clearance rates topping 60 per cent there are plenty of buyers in the market.
RP Data senior analyst Cameron Kusher said interest rate cuts may still have a positive impact in December, but wouldn't likely push prices far.
"The figures show a pretty weak month for Melbourne,'' Mr Kusher said.
"Although we have really seen some improvements over the last few months, the market is still pretty volatile.
"We haven't seen a recovery yet.''
Most of the weakness appears to have been driven by the unit market, down 3.2 per cent for the month and seeing the worst return year-on-year (- 6 per cent) of any of the capital cities.
Mr Kusher said the dip may indicate Victorian's are seeking to manage existing debts rather than adopt new ones.
"Housing credit is growing very slowly, people are very conscious of their level of debt and paying it down rather than taking on new debt,'' Mr Kusher said.
Real Estate Institute of Victoria spokesman Robert Larocca said the figures shouldn't alarm homeowners, and may be good news for those looking to buy.
"It's nothing to worry about at this point - you see these sorts of changes in a market with low volumes,'' said Real Estate Institute of Victoria spokesman Robert Larocca.
"It just means those buyers out there between now and Christmas don't have to worry about escalating prices.''
The fall in values comes after property prices grew 1.4 per cent to the end of September.
Melbourne is still better off than Canberra, Adealide and Hobart, the worst performing capital in the country which has fallen 4.5 per cent over the last month.
Perth and Darwin both bucked the national trend and posted gains for the month.
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