The median price for a home in Melbourne’s inner suburbs has topped $1.1 million for the first time, the Real Estate Institute of Victoria will announce today. The $1,164,500 median price for the first three months of this year was up from $1,099,000 in the December quarter – a six per cent increase. Inner Melbourne median house prices have been on the rise since June 2012 when the median price was $848,500.

“This is a year-on-year change of 11.7 per cent in the inner suburbs’ median – that is, those within 10 km of the Melbourne CBD,” said REIV Chief Executive Officer, Enzo Raimondo. “This reflects the strength of the Melbourne market in the low interest rate environment and the demand for homes close to transport and excellent infrastructure.”

Raimondo said eight of Melbourne’s top 10 most expensive suburbs are located in inner Melbourne including Toorak, Camberwell, Hawthorn and Malvern East. Toorak’s house prices increased 15.8 per cent this quarter and with a median of $3,300,000 remains Melbourne’s most expensive suburb. “By the September quarter of 2013 the median price of $971,500 broke the previous record, set in March 2010," said Raimondo. "Since then, there has been an increase every quarter and with it, a new record. By March last year the inner Melbourne median had broken the $1,000,000 barrier.”

The auction market was driving price growth in the inner city, Raimondo said. This year has seen 7600 auctions across Victoria, with 4200 of them in March. The 76 per cent clearance rate for the year to March 31 is the highest for five years. Inner Melbourne also had the fastest private sales in March with the number of days on market there falling by 11 to 38.

The March quarter median price of a home in the middle ring suburbs was $791,000, up 4.4 per cent on the December quarter, while in the outer suburbs the $503,500 median was up 0.2 per cent. Raimondo said the median house price for metropolitan Melbourne for this year’s March quarter was $688,000, up 3.5 per cent on the December quarter’s $664,500 median. That’s a year-on-year change of 10 per cent.

Apartment prices were also up across the city with the $519,500 median up 2.2 per cent on December and 5.2 per cent year-on-year.