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Market Snapshot February 2006

As predicted in our previous issue, the Melbourne property market has experienced moderate growth over the previous quarter. We are finding that there has been an increase in the number of properties that are selling prior to auction. Quality properties are once again attracting multiple bidders on auction day. These conditions are symptomatic of normal market conditions. Much of this demand has been driven by owner occupiers, over the last twelve months the number of buyers looking to invest has reduced significantly. With these improved market conditions we believe more investors will return over the next twelve months.

"Melbourne's median house price remained steady at $360,000 as did the unit/apartment median of $300,000. Over the last 12 months, this represents a rise of 2.4% in the median house price and a 4.5% increase in the unit/apartment price. The results confirm an end to the soft price landing and are an encouraging return to a normal growth market following the end of the boom two years ago. The REIV continues to predict growth of around 2 per cent for the calendar year."*

As for the future we believe there will be moderate growth over the next twelve months. Quality properties will perform well, i.e. properties in exceptional locations with scarce and unique features. 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. Taking all these factors into account, an astute purchase will result in double-digit capital growth over the next twelve months.

*Source; Real Estate Institute of Victoria

 

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