A much-needed boost of new stock being added to the market—more than 40,000 additional homes listed nationally in the month according to CoreLogic—meant the pressure eased and March's historic growth rate of +2.8 per cent was followed by a more sustainable increase of +1.8 per cent in April.
That's still a very significant uptick, though, and with Melbourne median dwelling values gaining +1.3 per cent for the month it's another important step towards the state's recovery from last year's pandemic-induced destruction.
Auction clearance rates remain solid, interest rates are frozen at a record low, regional areas continue to boom and the much talked about 'fear of missing out' factor is still driving a decidedly hot market.
Melbourne market update - April 2021
The +1.3 per cent rise in Melbourne's home values in April translates to a median dwelling price of $744,679.
That totals a +5.8 per cent increase over the past three months. While strong in any other context, those numbers are still below the national medians.
Melbourne's economic recovery is still lagging behind the rest of the country to a degree due to the state's extended lockdowns in 2020 and the uncertainty that lingered in the months afterwards.
Buyers' appetites have remained healthy, though, and that's reflected by positive auction clearance rates that are holding in the 70 per cents for Melbourne.
Preliminary auction data collected by CoreLogic for the first weekend of May shows the city's clearance rate shooting up to 77.1 per cent and the number of homes going under the hammer increasing from 957 in the previous week to 1,277.
According to Domain's latest House Price Report released in late April, houses in a few Melbourne regions performed especially well in the first quarter of 2021.
Melbourne's Inner East and Outer East registered +7.1 and +6.0 per cent value increases over the three month period, with the Inner South also posting a very healthy +5.3 per cent jump.
Houses in the Mornington Peninsula shot up a massive +6.7 per cent, totalling a year-on-year increase of +16.6 per cent.
It's also worth noting that, unlike in Sydney, Brisbane and Adelaide where growth has been especially house-led, house and unit values in metropolitan Melbourne have risen at a relatively comparable rate.
CoreLogic's research director Tim Lawless points out that, despite broad underperformance at the national level, "the Melbourne unit market has seen values consistently rising since October last year, with the trend accelerating over recent months."
Regional VIC market update - April 2021
After an especially strong March that saw regional Victoria push median values up +2.6 per cent, the state market has also eased off in April, posting a +1.8 per cent gain.
That's just shy of a $10,000 increase for the month.
It caps off a decisively buoyant three month period that's totalled a median dwelling value increase of +7.1 per cent.
Unlike some other states and cities where house and unit prices have behaved quite differently, regional Victoria is showing little disparity between the two property types, and in fact units are performing slightly better for the quarter—up +7.5 per cent versus houses on +7.1 per cent.
Over the course of the past 12 months, units in regional Victoria have outperformed those in any other city or state, growing a mighty +13.6 per cent.
It supports the continued narrative of the post-Covid exodus from cities as people look to take advantage of flexible working conditions and seek more space in lower density areas.
Melbourne and VIC rental market update
Again as a result of the long-term halting of overseas migration, Melbourne remained with Sydney as one of the two cities with the lowest gross rental yield in April, currently sitting at 2.9 per cent.
According to the REIV, the weekly median rent for houses in metropolitan Melbourne rose to $495 in March, up from $480 in February, although vacancy rates also increased from 6.0 to 6.5 per cent.
Domain's quarterly rental report, which came out in mid-April, stated that "for the first time on record, Melbourne is the second most affordable capital city to rent a house, joint with Perth and behind Adelaide."
Units told a similar story, and "tightening rental conditions in Adelaide and Perth could push rents higher than Melbourne in the coming months, which would make Melbourne the most affordable city to rent."
Rental returns were higher in regional Victoria than in Melbourne, remaining steady at 4.1 per cent, however this still ranked lowest compared to the other states.
Regional houses saw a rise in median rents from $380 to $390 in the same period where vacancy rates remained stationary at just 1.0 per cent.
What's next for the Melbourne and VIC markets?
ANZ Bank's latest bullish forecast outlines an expected +17 per cent total increase in housing values nationally by the end of 2021, with Melbourne predicted to rise by +16 per cent.
They then anticipate APRA to introduce macroprudential measures to slow market growth into next year, plotting +6 per cent national increases in 2022.
The latest Domain House Price Report shows that Melbourne is on track to reach a median house price of $1 million by the middle of the year.
Domain's senior research analyst Dr Nicola Powell explains "it will take just over half of the growth recorded over the March quarter to achieve this milestone."
After such a strong start to this year, Tristan Tomasino, director and senior auctioneer at Biggin & Scott in Yarraville, says "I feel like we are approaching the peak of the market."
On the point of the expected regulation, he says "I think we will see APRA tighten the screws around lending, and that will mean that people won't be able to bid as freely as they have been at auctions."
"That's obviously going to mean less bidders, less properties selling, and obviously that's going to affect the [auction] clearance rates, plain and simple."
Until that point, though, signs are still pointing to further sustained growth across the state.