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Market Snapshot March 2004

Market Snapshot Over the last six months the Melbourne property market has softened for certain types of properties. As predicted in our last issue,this has particularly been the case with lower quality properties eg. properties in inferior locations that lack unique features. These properties are taking longer to sell and are generally selling for approximately five per cent less than six months ago.Recent interest rate increases have definitely had an impact on the property market.

Melbourne house and unit prices have grown 11.2 per cent and 8.0 per cent respectively, over the year to the end of the September quarter. The median house price has increased to $368,000 and the median unit price has increased to $290,000. This represents a 2.5 per cent and 3.9 per cent increase respectively from the previous quarter. This also represents the 10th consecutive quarterly rise. As can be seen by these figures, the market is still in a healthy state. Housing affordability continues to be a concern, with only four suburbs in Melbourne recording a median house price under $200,000, compared to this time last year when there were seventeen suburbs under $200,000.

As for the future we are certainly not predicting a substantial correction in the market, as some commentators have espoused.Over the next six months we believe the market will continue to appreciate moderately. Relatively low interest rates, strong employment and a shortage of quality stock will ensure that reasonable capital growth is achieved. The critical factor in achieving this growth is to be even more selective in ensuring that the best possible purchase is made. The top end of the market and apartments in the city are at greatest risk.

 

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