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Market Snapshot February 2007

As predicted in our previous issue, the Melbourne property market has experienced moderate growth over the previous quarter. The recent interest rate increases have only slightly dampened the Melbourne market. Quality properties are still attracting multiple bidders and achieving excellent prices. These conditions are symptomatic of normal market conditions. Much of this demand has been driven by owner occupiers however we have noticed more interest from investors over the December quarter.

* Melbourne's median house price has almost returned to the peak of December 2003, which was $380,000. This quarter's price data shows that all the fundamentals of the Melbourne property market are on track, the median price is steadily appreciating, stock availability at auctions has increased 11 per cent on 2005 and the clearance rate is up 5 per cent. The September quarterly median house price rose $5,500 from a revised June quarter median of $371,500 to $377,000. The unit and apartment median also rose 1.6 per cent in the quarter and 6.7 per cent from the corresponding quarter in 2005.*

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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