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Market Snapshot - November 2007

The Melbourne property market has experienced substantial growth this year. This upward movement has been the result of a relatively flat price growth over the previous couple of years. As always quality properties, i.e. properties in exceptional locations with scarce and unique features have benefited the most from this latest upswing.

* 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 is still a lot of steam left in the Melbourne property market. As always the quality of the asset you purchase is more important than when you buy it. Astute selection is everything. 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. The danger we face in the future is that household debt is starting to become excessive. It would only take a few more rises in interest rates or increase in the unemployment rate for many people to face a financial crisis. Purchasing quality assets will insulate against any economic downturn.

 

*Source; Real Estate Institute of Victoria

 

 

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