On page 13 of today's (Feb 20, 2010) Herald Sun - that source of all wisdom and quality, well-researched journalism - is an article entitled "Broady's million-dollar future".
There are also photos of 4 houses from disparate suburbs with a median and "Forecast 2019 median".
Suburb.........Today's asking price...Suburb median....Forecast median
Hawthorn......$1.5 million-plus........$1,406,000........$5,226,268
St Albans......$369,000.................$360,000...........$1,012,105
Bundoora.......$462,500.................$470,000...........$1,397,059
Moorabbin.....$600-680,000...........$642,500...........$1,629,713
On the same page article entitle: "Now up go home loans".
I've just come from an auction that was listed at $370-400,000, and it sold for $495,000!! I was expecting around $450,000!
What's my point with all this?
Not a D&G'er, but does anyone else agree with my assessment or do you have a counter-argument?
(PS. Is there a neat way of entering a formatted table?)
My emphasis.Herald Sun said:A house in working-class Broadmeadows will cost $1.2 million in 10 years if prices rise by as much as they have over the past decade.
For now, a house in "Broady" can be snapped up for a median price of $357,500, despite a 240 per cent rise over the past decade.
The million-dollar Broady market is part of a scenario painted by the REIV.
[...]
Only 9 of the 121 suburbs included in the research will have a median of less than $1 million. These include Sunbury, Frankston, Deer Park, Keilor Downs, Taylors Lakes and Healesville.
REIV research manager Robert Larocca said there was a possibility prices could rise even more than the data predicted because demand for property was increasing and supply was still tight.
[...]
But Mr Larocca warned price rises were never guaranteed. "For the next decade, history tells us we are more likely to see more moderate growth with prices doubling on average every 7-10 years"
There are also photos of 4 houses from disparate suburbs with a median and "Forecast 2019 median".
Suburb.........Today's asking price...Suburb median....Forecast median
Hawthorn......$1.5 million-plus........$1,406,000........$5,226,268
St Albans......$369,000.................$360,000...........$1,012,105
Bundoora.......$462,500.................$470,000...........$1,397,059
Moorabbin.....$600-680,000...........$642,500...........$1,629,713
On the same page article entitle: "Now up go home loans".
I've just come from an auction that was listed at $370-400,000, and it sold for $495,000!! I was expecting around $450,000!
What's my point with all this?
- An article in a tabloid newspaper that insinuates that "you'd better buy now because houses will be worth $1m in 10 years" is suggesting to me the market (at least in Melbourne) is overheated.
- Similarly, articles suggesting that "prices could rise even higher" without even contemplating that "prices could stagnate or fall" (but I guess that doesn't sell newpapers!)
- Commentators (such as the author of this article) ignoring significant factors that affect property prices such as income levels and income growth, unemployment, interest rates and changing demographics, yet still suggest that growth can (will?) continue based purely on apparent supply constraints.
- Auctions attended by 100+ people, with 5-6 serious bidders pushing the price past estimation by more than 20%, also suggests plenty of heat in the Geelong market. (10% I can handle, 20% to me suggests an agent who has no idea of values or a heated market)
Not a D&G'er, but does anyone else agree with my assessment or do you have a counter-argument?
(PS. Is there a neat way of entering a formatted table?)