Peter Rogozik Property Consulting: Your Buyers Advocate - Connecting People and Property

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Market Snapshot August 2005

As predicted in previous issues the Melbourne property market has experienced further softening over the previous quarter. In our opinion only lower quality properties have been affected by this price reduction. Well-located properties close to village-style shopping centres, schools and public transport are still attracting strong interest and hence good prices, however other properties are struggling. The bayside suburbs continue to be very popular places to invest for our clients. We are also finding a growing number of our investors purchasing in the inner west of Melbourne. These investors are taking advantage of the substantially reduced entry prices and hence buying costs. Capital gains in some of these suburbs have been as good as anywhere in Melbourne.

"Melbourne’s median house price dropped 4.9 per cent over the March quarter to $352,000, down from $370,000 in the December quarter 2004.

Melbourne’s median unit/apartment price similarly recorded a median price fall of 5.0 per cent over the quarter to $285,000 down from $300,083 in December.

The fall in both house and unit/apartment prices over the year of 4.9 per cent and 2.3 per cent respectively is further evidence that the residential property market has softened. Whilst the February interest rate rise may have had some impact on the property market, much of this quarter’s movement can be put down to seasonal variations which historically show that March quarter prices usually fall."*

As for the future we believe there will be moderate growth over the next twelve months. It is more important than ever that investors choose quality property as the market will be less forgiving compared to previous years. Recently announced land tax concessions and the continuation of the State first home buyers’ grant will assist property investors and first home buyers. At the moment the fundamentals of the economy are sound, employment is strong, interest rates and inflation are relatively low and consumer confidence is high. This should ensure quality properties enjoy reasonable capital gains over the short to medium term.

*Source; REIV

 

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