However, buyers are facing a severe shortage of listings for these properties. Those in Williamstown South and Bayside beachfront precincts are also offering fewer listings as more owner-occupiers are choosing to renovate rather than move out.
Because of the shortage of renovated homes, more upgraders are looking at properties that are liveable but had scope to be improved.
"The next level up for houses—around $1.5 million up to $2 million—is also strong," said Wilson Agents director Graeme Wilson. They operate through Caulfield and the inner south, which are seeing robust demand for period houses from $900,000 to $1.2 million.
"There is plenty of inquiry for what we've got, but people are looking for a lot more property than what's on offer. Demand is clearly outstripping supply in our area," he said.
Real estate agents in the northern suburbs also predict lean listings going into winter. Victoria Valuer General figures show that there were 90,071 property transactions in Melbourne in 2014, compared to 89,706 in 2013.
According to Domain Group chief economist Andrew Wilson, Melbourne is clearly the best performer of the mainland capital cities. It is also leading the other capitals when it comes to house price growth, even though growth is at a slower pace than the 14.5 per cent growth recorded last year.
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