Confirmation of the heat in Melbourne - New median 420,000

[jazzlobber]

yes thats right folks, melbourne is ramping up.

10% increase in last quarter

12% increase on last year.

http://data1.reiv.com.au/trendchart/

http://www.theage.com.au/news/national/big-surge-in-house-values/2007/07/27/1185339260581.html

we have a while to go yet but i think melbourne has a few good years ahead to catch up with syd & perth

 

[JIT]

Definitely confirms my anecdotal experience, with 20-30% growth in some inner/bayside Melbourne suburbs.

GSJ

 

[Ausprop]

"we have a while to go yet but i think melbourne has a few good years ahead to catch up with syd & perth"

why do you feel that? Perth's cap growth occurred from (a) large population increases (b) wage increases (c) hopeless state govt, just wondering if Melbourne is sharing any of these or if there is somehting else going on? Gardner and Lang is bullish on commercial but then as a Melbourne agency I am not sure what it is worth.

read an interesting article today covering a report released by some lobby group... called for the WA planning minister to be dismissed and to release enough land to keep price increaes to 3% max for 4 years to allow wage increases to overtake cap growth. Is interesting when you have investors cheerign for cap growth and yet the ministers can be potentially sacked for it. Maybe investors should send a Christmas present to all hopeless state pollies!

 

[Giulio Taranto]

lets all get our valuations done now !!!

 

[timmyboy]

"we have a while to go yet but i think melbourne has a few good years ahead to catch up with syd & perth"

why do you feel that? Perth's cap growth occurred from (a) large population increases (b) wage increases (c) hopeless state govt, just wondering if Melbourne is sharing any of these or if there is somehting else going on? Gardner and Lang is bullish on commercial but then as a Melbourne agency I am not sure what it is worth.

Interesting article primarily focused on population growth

http://www.theage.com.au/articles/2007/07/24/1185043115516.html

 

[jazzlobber]

"we have a while to go yet but i think melbourne has a few good years ahead to catch up with syd & perth"

why do you feel that? Perth's cap growth occurred from (a) large population increases (b) wage increases (c) hopeless state govt, just wondering if Melbourne is sharing any of these or if there is somehting else going on? Gardner and Lang is bullish on commercial but then as a Melbourne agency I am not sure what it is worth.

read an interesting article today covering a report released by some lobby group... called for the WA planning minister to be dismissed and to release enough land to keep price increaes to 3% max for 4 years to allow wage increases to overtake cap growth. Is interesting when you have investors cheerign for cap growth and yet the ministers can be potentially sacked for it. Maybe investors should send a Christmas present to all hopeless state pollies!

Because of Supply and Demand, melbourne has plenty of the latter. Population increase is strong here, i just cant see melbourne saying in 4th place for much longer (capital city medians)

 

[alexlee]

Is this rippling out to the outer suburbs? i.e. ones at the end of the train lines.
Alex

 

[Kennethkohsg]

1. I wonder what causes the median house price in Melbourne to fall in the March 2007 quarter and the extent of this fall in its median house price?

2. Are the local RE agents and news trying to talk up the market boom again?

3. They have tried to do so, some 6 months ago, through "under-quoting" the house prices being listed for sale as well as reports of increased clearance rate for the house auctions, until it becomes an open secret that a fall in its median house price in the March 2007, has been reported.

4. Unless there are fundamental reasons and specific key drivers for this new boom within the Melbourne Property market to occur and be strongly suported by it, I do not expect the boom to be a "big" one, as there seem to be similar reports of recent housing mini-booms within the Brisbane, Adelaide and Canberra property markets;- after all, the major bulk of the investors' monies from the Australian share market has still not been officially diverted into the local property markets yet.

5. If RBA introduces another imminent 0.25% interest rate increase in August 2007, as is presently expected by many local economists, the present emerging boom within the Melbourne Property Market, may suffer from another false start again.

6. For your kind update and further comments/discussion, please.

7. Thank you.

regards,
Kenneth KOH

 

[chrispy]

I think the Melbourne suburban increases are due to the Perth lot buying in

Chris

 

[Ausprop]

I have thought the same... do you think the wieght of money could be enough to influence the market? our weekend papers are full of melbourne property

 

[JIT]

Is this rippling out to the outer suburbs? i.e. ones at the end of the train lines.
Alex

Yields are improving, but I don't believe there's much CG there yet, and with some imminent rate rises it may be a little while to go still.

It is only a matter of time...how much time is the big question!

GSJ

 

[JIT]

2. Are the local RE agents and news trying to talk up the market boom again?

So how do you explain as much as 30% or more growth in 12 months in some inner and bayside Melbourne suburbs?

Sure REA's are talking it up, that's what they do! - but prices are in fact increasing for well positioned properties in selected suburbs.

If you were looking to buy a 300k property in these suburbs in Melbourne 12 months ago, but were waiting for 'fundamentals' to improve, you would now have to pay 390k to buy the same property.

If you had a 10% deposit of $30000 ready 12 months ago, it now means you need $39000 to buy the same property, or an extra $9000.

If in that time your wages/savings haven't increased a further $9000, you are now priced out of this market!

And this is all because some smarty pants are saying the 'fundamentals' aren't right.

And perhaps the median didn't move a great deal because of a 'crunch' in prices in the mortgage belt outer suburbs?

GSJ

 

[chrispy]

It would be interesting to find out how many WA SS investors have put money into Melbourne/Victoria.

Chris

 

[oc1]

I have noticed north/inner north suburbs with 12 km's to the city have incresed consideably. One property I purchased this time last year (10km's to city) has risen 50% in price (Reservoir). Just a basic 3 b/r house. Price rises aren't great the further out you go. There is barely any quality stock. Thats what is driving prices.

 

[Kennethkohsg]

So how do you explain as much as 30% or more growth in 12 months in some inner and bayside Melbourne suburbs?

Sure REA's are talking it up, that's what they do! - but prices are in fact increasing for well positioned properties in selected suburbs.

GSJ

&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&
Dear GSJ,

1. This is also happening within the present Perth and Sydney property markets, at this point in time, as well as those in the Brisbane and Adelaide property markets. It is, not neccessarily, confined to/ being "uniquely" in the Melbourne property market alone.

2. From what I have read and understand, in general, the high end properties are still doing very well under today's market conditions across all the various Australian States...However, I am not sure whether they will continue to do so in the near future, given the sudden global/ASX share market's melt-down last weekend over renewed concerns and inreased risks shown over the US continued housing market slump and its sub-prime mortgage banking crisis.

3. How much did the median house price in Melbourne last fall during the March 2007 quarter? Why does it falls then if the Melbourne property market has indeed "boomed"?

4. For your kind update and further comments/discussion, please.

5. Thank you.


regards,
Kenneth KOH

 

[Norwester]

Chris,

I'm sort of an expat Victorian, but will apparently never be a West Australian, (not born there - you know how it goes.......... )

It's got to the point where I no longer actually say that I'm from WA...................sometimes you can actually hear the cash register ringing in the background............


My little niche in Melbourne is getting pretty much belted across the ears by the sandgropers.......so much so that I've had to find another niche and in another state (the one surrounded by water). Interestingly enough my next target's gunna be right in Perth.........seems to be some better value buys around that some of the locals seem oblivious to............

Just my humble opinion..........

ciao

Nor

 

[jazzlobber]

Definitely confirms my anecdotal experience, with 20-30% growth in some inner/bayside Melbourne suburbs.

GSJ

GSJ, also in an article on saturdays AGE, they had figures for YOY growth for upper and lower quartiles @

16.4%
5.7%

respectively

which indicates that yes the inner burbs are growing far greater at the moment than the outer (in general)

I did spot one suburb Ashburton on the list that grew by 68.4% in the last quarter. I think this a bit of an anomolay and the annual figures will flatten it out, but man 68.4% jump in 3 months - wowsa

gone from $500,000 median in March 07
to $841,750 median in June 07

 

[Twitch]

How much did the median house price in Melbourne last fall during the March 2007 quarter? Why does it falls then if the Melbourne property market has indeed "boomed"?

Kenneth, for each of the last 6 years the Melbourne median price has fallen in the March quarter (ref: reiv) but the median value has risen in the same (ref: residex).

 

[Twitch]

Heres a link to the suburb by suburb data.

Enjoy

 

[MTR]

Hi Twitch
Thanks for that information.

I purchased a period home in Coburg recently (9km Melb), my BA provided the stats at the time, in the report the median house price for March 2007 was $410K, median is now $484K. Great news.

I also asked him who was buying?? I also assumed many from WA, apparently not so, he mentioned many cashed up buyers in Melb jumping in, and simply demand for quality stock is greater than supply.

I also received an email from a BA today, they purchased a single fronted 2 bed home in Windsor, agent quoting $550K, reserve mid $600K, sold for $776K. They were completely blown away with this sale price.