For years the experts said Australia was different. Due to a so called shortage of houses, prices could only go up, new buyers would just borrow more and our record household debt levels – well it was not really an issue and we would rather not talk about that. When it became apparent the 20 percent p.a. growth rates started to slow to a snail’s pace, the experts said Australia’s housing bubble wouldn’t burst, rather just flatten out for 5 to 6 years.
Today, those experts are no where to be seen.
Despite Enzo’s auction clearance rates portraying Melbourne as the healthiest real estate market in the country, the Real Estate Institute of Victoria has reported that Melbourne’s median house price has fallen 6 percent in the three months to March. This is the biggest fall in prices since the GFC which prompted the Federal Government to prop up the ailing property market with the First Home Buyers Boost.
The Melbourne Herald Sun reported :
MELBOURNE’S property bubble is bursting, with $400 a day wiped off the average house price in the past three months.
After peaking at $601,000 late last year, the median price has fallen to $565,000 – down $36,000.
The 6 per cent slump is the biggest quarterly drop in more than two years and one of the biggest the Real Estate Insititute of Victoria has recorded since the height of the global financial crisis.
It has raised hopes for buyers desperately trying to break into the market and will create speculation over whether a crash is coming.
The weekend edition of the Australia Financial Review said :
Melbourne’s house prices have started to fall as the city’s property market nears tipping point brought on by a lack of affordability and the threat of further rate rises, analysts say.
This weekend will be a further test to the Melbourne property market with over 1000 properties up for auction.
» Melbourne home property prices plunge – The Herald Sun, 16th April 2011.