'They'll look back with regret’: These 4 suburbs have lost their $1 million median price tag

Four capital-city suburbs nationwide dropped out of the $1 million clubin the third quarter of this year – and they were all in Greater Melbourne, new data has revealed.

Whilst the majority of headlines in recent years have been about prices rising and suburbs passing the $1 million median house price benchmark, the latest Domain House Price Report shows there are suburbs going backwards and dropping below that threshold.

The four suburbs that fell out of the $1 million club last quarter – as opposed to the 32 that joined it for the first time – are Beaconsfield, Riddells Creek, Sandhurst and Gisborne, which was home to the 2022 season of reality renovation TV show The Block.

 Those four suburbs represent opportunities for buyers, says Domain chief of research and economics Dr Nicola Powell.

“When you’ve got those suburbs in our major capital cities like Melbourne falling out of the million-dollar club, it really showcases the value that some of these suburbs can potentially provide,” she says.

Melbourne’s overall median house price fell for a third consecutive quarter by 1.5 per cent (or $16,000) to $1,024,243.

“It means opportunity for buyers,” Powell says. “Obviously, for sellers, it’s challenging when prices are falling, and their home is not worth as much as they once thought it was. But from a buyer’s perspective, when you see it shrink below that million dollars, it presents an opportunity.”

In Gisborne, 41 kilometres north-west of Melbourne, the median house price slipped 1.7 per cent (or $17,500) to $987,500. 

$2,550,000-$2,650,000

49 Heard Crescent, Gisborne South VIC 3437

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Dimming demand has made prices fall, says local agent Damien Walder of Bound Real Estate.

“There’s definitely a lot more property on the market,” he says. “And there’s not a lot of urgency from buyers as well.” 

There has also been a rise in the number of investors selling off their properties, giving owner-occupiers more choice and negotiation power, Walder adds. 

However, he says this influx of available supply is not exclusive to Gisborne but applies to the entire Melbourne region.

Powell says the build-up of stock is very evident in Melbourne and Sydney, adding, “I think it’s likely to continue for the rest of this year.”

Walder believes the tide will turn next year when the Reserve Bank finally cuts the cash rate.

“The minute we see a rate cut, all those lookers will become buyers very quickly,” he says. “I think they’ll look back with regret that they should have bought sooner.”

Riddells Creek, east of Gisborne, experienced the largest price fall at 5.9 per cent (or $60,000), bringing the median down to $955,000.

“[Prices] did drop finally because the interest rates sort of levelled out a bit,” says local agent Amanda Burt of Raine and Horne Sunbury.

$770,000 - $820,000

9 Bolithos Road, Riddells Creek VIC 3431

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She says house sales have been consistent at roughly 30 per month but demand amped up during COVID, bringing prices up as well. After several cash rate hikes and the disappearance of social distancing restrictions, the market began to stabilise.

“Vendors’ expectations were very high, so we’ve had to bring them down to reality again,” Burt says.

She has also recently seen more investors needing to sell their properties at a loss, which has heavily affected the median house price. 

“If [investors] bought at the peak of the market, they haven’t been able to recoup it, and they might have lost between $20,000 and $50,000,” she says. 

Unlike Walder, Burt believes the predicted cash rate cuts will not cause Riddell Creek’s prices to jump, but it will “just increase a little bit – it won’t go crazy again”.

Closer to the Melbourne CBD is Sandhurst, where the median house price fell by 3.1 per cent (or $32,000), pulling the median price down to $990,000.00.

In this south-eastern suburb, the median house price constantly fluctuates depending on what properties have sold throughout the quarter, says real estate agent Michelle Stephens of OBrien Real Estate Carrum Downs.

SOLD - Price Withheld

37 Ethereal Way, Sandhurst VIC 3977

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“There are so many different factors which make up pricing in Sandhurst; you go through waves,” she says. “There might be demand for higher price tags that might not be on the market at a particular time – like specific views, the age of [the house] or the location in the estate.”

There are periods when what comes onto the market are “stock standard” homes that don’t have massive price tags and bring down the median price of the suburb, but then the opposite happens with more expensive homes, and the median price jumps in a quarter, Stephens says.

“You’ll have some properties that are four-bedrooms that might sell for $850,000, but they will have a four-bedroom home that might be worth $2 million as well,” she says. “So there’s such a variance of properties [in the market in any given quarter].

“There are not many of the $2 million properties or $1.5 million properties on the market at the moment. So obviously, it changes the median.”

It is unclear how long this downward trend will continue in Melbourne, but consumer sentiment is improving, and we should see stronger turnover rates and price growth ratesin 2025, Powell says. 

“When you see a rising consumer sentiment, particularly when it goes into positive [sentiment], that plays out historically in a positive manner for the housing market.”