The comeback of Toorak: sales surge in Melbourne's most prestigious suburb

Toorak has made a comeback as Melbourne’s luxury housing market, which took a post-GFC hit, regains its sparkle.

The leafy east has been the engine room this year of the wider property market. And at its heart is Toorak – the traditional bastion of manors and money, and one of Australia’s wealthiest suburbs.

The median house price in Toorak has leapt 13 per cent over six months to September, reaching $3.4 million, Domain Group data shows.

Over the past five years, the house median has soared by 47 per cent.

Downsizers will pay an extra 28 per cent for units, measured over the same period, forking out a median of $892,500, which represents 19 per cent growth over five years.

Kay & Burton joint managing director Ross Savas said his agency recently handled $125 million worth of real estate in five days, across blueribbon postcodes including Toorak.

The clearance rate in Toorak in 2008, when the global financial crisis hit, was 51 per cent. It has steadily increased – bar a blip in 2011 – to sit at 74 per cent this year.

Property developer and long-time Toorak resident Jeff Provan said the postcode had changed greatly in the 20 years since he built his Canterbury Road family home.

He said there was a time when the local primary school was threatening to close and residents couldn’t get a decent coffee.

Provan sold the property about three weeks ago, but his heart remains close to the suburb – his company Neometro has completed a six-apartment project in Toorak’s Brookville Road, on the lip of South Yarra.

“We saw a real opportunity for downsizers, baby boomers wanting to move in a little closer and have something quite convenient,” Provan said.

“There are still a lot of single-fronted workman’s cottages and larger houses – there is a real diversity of building stock in this area.

“I have been watching it grow and watching the primary school go from almost closing to bursting at the seams, and have seen an influx in of younger families and a diverse population and socio-economic groups moving back to the area. 

“That is a good indication of what the area is about. I think I had my first coffee in Toorak village in 20 years about one or two years ago.”

Domain Group senior economist Dr Andrew Wilson said the upper  of the Melbourne market had been flat since the GFC.

“Toorak is back in town – top-end properties have had a very good year,” he said.

“The heady heights of Toorak have really started to re-engage the market after a couple of years of sitting on the sidelines.

“Prices have grown. It really is a market that has regained all of that confidence that was not lost but certainly was subdued since the GFC.

“The big picture at the end of the day is that prestige property in Melbourne still offers good value.”

Developer Luke McKie from Orchard Piper – whose projects include high-end apartments, priced up to around $17 million, in Toorak’s Washington Street – has noted apartment construction at a level not since the 1990s.

“Toorak is one of the rare spots in Melbourne, especially close to the city, where you can find good sized land,” he said.

“Because of the way it was subdivided in the early 1900s, you end up with a lot of large houses and large parcels of land, and hills with views of the city.

“It always has been a great place to live, but I don’t think people have paid as much attention over the years to the fundamentals of what makes Toorak so good.”